After a quiet August, September bodes to be much more active. Here is a list of upcoming events in the short run:
1)September 11 – 17 is the peak of Hurricane season. With Hurricane Hermine becoming the first Hurricane since Wilma (11 years ago) to reach the Florida coast, it is safe today to say that hurricane season has officially begun. Any significant damage from future hurricanes in the gulf could hurt oil production and impact the price of crude oil and gasoline. This is obviously an unknown event, but it is often the unknowns that have the most impact, as the markets have not priced them in.
2) September 20 – 21 is when the next Federal Reserve (Fed) meeting is scheduled. After the September meeting, it meets next on November 1 – 2, right before the U.S. presidential election. LPL Financial Research does not expect an interest rate hike that close to the election and in fact, going back to 1990, the Fed has raised rates only once within two months of a presidential election and that was in September 2004, making rate hikes right ahead of presidential elections rare. LPL Financial Research believes a December rate hike is probable and the odds of a September hike are somewhat low.
3) September 20 – 21 Falling on the same two days of the Fed meeting is the Bank of Japan (BOJ) meeting. At the last BOJ meeting on July 28, 2016, the BOJ expanded monetary policy, but in a much more limited way than expected. Since then, the Japanese government expanded fiscal policy, but also in a way that disappointed. In LPL’s view, be on the lookout for the BOJ to expand the purchases of bonds, stocks, and real estate securities later this month.
4) September 26 The first of three scheduled presidential debates will take place on September 26 at Hofstra University in New York at 9 p.m. ET. The second debate is on October 9 in St. Louis, Missouri; and the final debate is on October 19 in Las Vegas, Nevada. Besides being “must watch” TV, these debates could effectively end the presidential race or keep things going well into November. It is clear that both candidates have some tough questions coming their way.
5) September 26 – 28 OPEC (the Organization of Petroleum Exporting Countries) is having an emergency meeting outside of its normal semiannual schedule at the end of September. This will be the third meeting in which an output freeze will be discussed. The key players are Saudi Arabia, Iran, and Russia. Russia is not a member of OPEC, though OPEC is trying to get it to agree to freeze, making Russia a de facto member of the cartel. All three countries have been pumping at near capacity, but anything is possible.
This tells you what is upcoming and that August’s quiet will most likely change – Mark
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss. Economic forecasts may not develop as predicted. Some of this research material has been prepared by LPL Financial. All indices are unmanaged and may not be invested into directly. Referenced material: LPL Research Weekly Economic Commentary, dated September 6, 2016. Approved Tracking #:1-533361.