The Fed's dual mandate is in focus this week. Employment and inflation. The two metrics Jerome Powell pretends to care about while he stares at a Bloomberg terminal like everyone else.
Both sides are being watched. By analysts. By economists. By retail traders who think the Fed actually makes decisions based on backward-looking data instead of whatever keeps Larry Fink's yacht operational.
Micron reports earnings. A semiconductor company that makes memory chips will tell you how many memory chips they sold. The stock will move 8% in either direction. None of the movement will correlate with the actual numbers they report. You'll read seventeen articles explaining why. All of them will be wrong.
Eli Lilly delivers updates on its obesity pipeline. A pharmaceutical company will provide new information about drugs that make fat people less fat. The stock price already moved last month when someone's cousin's friend who works in clinical trials posted a thumbs-up emoji on Reddit.
These are the four big things to watch. Except they're actually three things. The Fed's dual mandate counts as two because financial journalists can't do math. Or they can. They just know you won't check.
Here's what happens next. The Fed data comes out. Micron reports. Eli Lilly updates. The market does whatever it was going to do anyway. Tuesday's price action will have nothing to do with Monday's news. Wednesday will ignore Tuesday. By Friday, algos will be trading on sentiment analysis of TikTok videos about mortgage rates.
You'll watch all four things. You'll read the analysis. You'll adjust your positions based on information that was irrelevant before it was published and will be forgotten before it's priced in. Your stop-loss will trigger at 9:47 AM. The stock will reverse at 9:53 AM. This is called being informed.
Photo by Maxim Hopman on Unsplash
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