PreMarket Prep Roundup: All Quiet On The Fed Front
After a month of extended volatility in August, September started with a bang right back to near all-time highs — and that was it. The reason for the pause in the action over the last few sessions was covered at the top of Tuesday's PreMarket Prep show.
The question on investor's minds: what will the Federal Reserve do with rates on Wednesday?
Odds Of Rate Cut Falling
It was a slam-dunk one week ago for a quarter-point drop, but that's no longer the case: the odds have fallen from 89% to 68%, according to the CME Fed Watch tool, which is based on Fed Funds futures.
The uncertainty of the Fed's next move has instilled caution in investors.
Investors were alerted that in order for the rally in crude oil to continue, the contract must take out the high from yesterday ($63.38) or just revisit Monday's close of $62.90. Rumors of when production will be resumed dominated price action as oil attempted to rally, but that rally has turned into a rout.
Spotlight On Kraft Heinz, Shopify
Kraft Heinz Co (NASDAQ: KHC) was one of the primary movers in after-hours trading to the downside, as long-term investor 3G Capital revealed it had dumped 25 million shares of its 270-million-share stake.
Following an extended rally since its Aug. 28 low ($24.86) to $29.71 last Thursday, traders took the lead and shaved roughly $1 off its closing price ($29.62).
PreMarket Prep co-host Dennis Dick was focusing Tuesday on the approximate area of the sale ($28.50) as a potential area of support in the issue.
Price action in Shopify Inc (NYSE: SHOP) was examined on the show Tuesday. After the bell Monday, the company announced a 1.9-million share offering at $317.50.
On most occasions, the share price offering acts as a floor, or support, for the stock in play. The issue acted true to this form, as it bottomed just below the offering price of at $316.10 and staged a major rebound to the $330 area off the open Tuesday, but has since faded into the $320 handle.
Barron's columnist Steven Sears joined the broadcast with numerous trading ideas, ranging from the financial sector to Chinese stocks. Also, his expectations for the continuation of the growth to value rotation were revealed, as well as his key to long-term survival in the markets.
Be sure to tune-in to Wednesday's show, when Tuesday's action will be reviewed and the catalysts for the upcoming trading session will be identified At 8:35 a.m. EST, Dan Forman of the Olivetree Group will share his research on the technology, media and telecom sectors.
PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunes, Google Play, Soundcloud, Stitcher and Tunein.
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