OP Wire 8/20 (OP – Lite)

By Steve

🔔 Market Update – Wednesday, August 20

1. Fed Minutes Could Show Divisions

Markets are waiting on today’s release of FOMC minutes, which could reveal just how deep the rift is inside the Fed.

Rates have been steady at 4.25%–4.50% all year. Powell has voiced concern that Trump’s tariffs could reignite inflation.
Trump has slammed the Fed for being too cautious, while Governors Waller and Bowman dissented, marking the first dual dissent since 1993.
Traders see a 25 bps cut in September as highly likely, with another later in the year possible.
Jackson Hole kicks off this week, with Powell’s address Friday morning in focus.

2. Futures Slip Ahead of Fed Minutes

U.S. futures are weaker ahead of today’s release:

S&P 500 -12 pts (-0.2%)
Nasdaq 100 -75 pts (-0.3%)
Dow -85 pts (-0.2%)

Tuesday’s trade was mixed: S&P -0.6%, Nasdaq -1.5%, while the Dow eked out a small gain.
Caution is the theme today as traders brace for Fed minutes and a heavy retail earnings slate (Target, Lowe’s, TJX).

3. U.S. Government Eyes Semiconductor Stakes

The White House is considering taking equity stakes in chipmakers receiving CHIPS Act subsidies.

Talks involve Intel, Micron, TSMC, and Samsung.
A Reuters report says the government may seek up to 10% ownership in Intel in exchange for billions in support.
This would mark a major shift in U.S. industrial policy, giving Washington a direct role in companies critical to national security.

4. Target Earnings in Spotlight

Target (TGT) reports before the bell. Expectations: EPS $2.03 on $24.9B revenue.

Analysts flag risks: slowing digital sales, tariff headwinds, weak ad/marketplace scale, and competition from Walmart & Amazon.
~50% of Target’s cost of goods sold comes from imports, leaving them highly exposed to tariffs.
Other reports today: Lowe’s (LOW), TJX (TJX).
Home Depot (HD) posted muted results Tuesday but kept its full-year forecast intact.

5. Musk Shelves Political Plans

According to WSJ, Elon Musk has shelved his plan to start a third political party (“America Party”) after falling out with Trump.

Musk reportedly told allies he will focus on his companies and avoid alienating Republicans.
Tesla (TSLA) shareholders likely welcome the news, as concerns had grown that Musk was distracted from his CEO role.

Market Levels & Sentiment

$QQQ closed 569.28 (-1.36%), testing support as downside momentum builds.
- Key levels: 560 support (must hold) → risk of retest at 540 pivot if broken.
Crypto/Commodities: BTC ~$113K, Gold ~$3,370/oz, Silver ~$37.2/oz.
Direction today hinges on Target earnings + FOMC minutes + Jackson Hole chatter.

Economic Calendar (ET)

10:30 AM – Crude Oil Inventories
11:00 AM – Fed Waller Speaks
1:00 PM – 20Y Bond Auction
2:00 PM – FOMC Meeting Minutes
3:00 PM – Fed Bostic Speaks
8:00 PM – Jackson Hole Symposium

👉 Stay nimble — Fed minutes could jolt sentiment. Eyes also on $TGT earnings for retail read-through.
See you in chat.

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