Rekt Mkts: Stocks bounce into the Fed, Clarity stalls

Well we're getting a decent bounce in stocks ahead of the Fed, with Korean memory leading the recovery this morning. Crypto is having a harder time after Clarity failed to advance yday...quite a different setup going into the same rate decision.

The Fed decision is today, along with updated projections and Warsh's presser. CME FedWatch has a quarter-point hike at roughly 93%, so the market is already heavily leaning that way. The more interesting part is what comes after it: whether the projections and commentary point to more hikes, or leave room to pause. TBH I just think that we wanna see a hike and move on, there's been too much flirting and a lack of clarity around what's going on...I don't see a world where we can see specifically dovish commentary given recent economic data, but I think a 25bp hike + some more clarity on what the next few months look like could be a positive tailwind for markets, which just want a degree of certainty. The 10Y is around 5% this morning after pushing through that level yday. WTI futures have eased about 0.9% to roughly $104.80, altho that's still expensive oil. There are fresh reports that crude loadings at Saudi Arabia's Yanbu export hub have been suspended and some European cargo deliveries cancelled. So a small pullback in oil isn't the same as the supply problem going away. Gold futures are up about 0.9% near $4,370.

Hynix finished up about 4.1% in Korea and Samsung 2%, which is a much better session for that part of memory compared to the US. Kioxia went the other way, down about 1.9% in Japan. S&P futures are up about 0.3% and Nasdaq futures 0.5% this morning. On the whole I think stocks actually feel pretty firm and we never really saw any follow-through selling despite the worrying headlines and to me I expect the sell-off from that news to be retraced provided we don't shit the bed post FOMC.

Majors are still softer over 24H, with BTC down about 1.4%, ETH 2.9% and SOL 3.5%. BTC is holding up better than the others, but there's no broad bounce in majors to match equity futures this morning. Clarity didn't get through yday. The Senate's vote on ending debate over the motion to proceed was 49 in favour and 50 against, short of the 60 needed. This was the procedural hurdle to get the bill moving, not a final vote to make it law. The hoped-for positive surprise hasn't arrived, and the bill remains stalled rather than giving crypto a new statutory framework. I was quite surprised at the negative price action given I believe this outcome was largely expected, and I think the more bullish catalyst is what we see next with the SEC and CFTC. I think this is a dip that will also retrace fairly quickly, again, provided we don't shit the bed post FOMC. ETF flows also turned negative again. US spot BTC ETFs had $450.4m of net outflows yday and ETH ETFs lost $142.3m, reversing Monday's inflows of $159.9m and $121.1m respectively. In both cases Tuesday's withdrawals more than wiped out Monday's additions...not much support from that side of the market. Today is also Circle's scheduled public-mainnet launch date for Arc. Its announced founding validators include BlackRock, DTCC and Visa. The institutional setup is substantial, but the useful next evidence is what actually gets used once public access opens, rather than treating the launch date itself as a reason for every related token to rally - personally I'm not getting involved here the vibe just feels a bit too "forced" to me. Good luck today.