Daily Market Color March 18, 2019Equities Hit Four Month High Ahead of FOMC Meeting Treasurys trim last week’s gains, yields rise 1-2 basis points ahead of Fed meeting. The US central bank is widely expected to leave rates unchanged and adjust down the official Fed forecast of 2 rate hikes in 2019 to match recent rhetoric. Currently markets are pricing in nearly a 30% chance of a rate CUT by year end and less than a 1% chance of any hikes in ‘19. The FOMC meeting will begin tomorrow and conclude Wednesday, after which the rate announcement and Fed Chair Jerome Powell’s press conference are to take place. US equities continue to rise, hit four month high. The S&P 500 and Nasdaq closed up 0.37% and 0.34% respectively, led by energy, consumer discretionary and financial sectors. The S&P Bank Index closed up 1.44% to 44.97, bringing its year to date performance to +20.40% despite a yield curve that has stayed stubbornly flat to start the year. Elsewhere, the VIX or “Fear Index” ticked up slightly, but still sits well below the higher levels maintained at the end of 2018. Speaker of Britain’s House of Commons blocks 3rd vote for PM Theresa May’s Brexit deal. John Bercow, who is known for his yells of “Order!” throughout parliamentary debates, decreed that May must first negotiate a significantly different Brexit deal before holding a 3rd vote. The ruling increases the odds of a no-deal Brexit on March 29th, but financial markets barely reacted, suggesting that a delayed Brexit is already factored into market expectations.