Whether or not stocks close higher today will be a reflection of how truly comfortable (enough to stay long overnight?) traders are with tomorrow’s Fed announcement (of course they could stay long overnight and unload at the open tomorrow).
While I do see the potential for a Fed hiccup tomorrow (unintended), I don’t believe that, at this juncture (too soon after December’s market bloodbath), the Fed governors have the stomachs for (or believe the economy is ready for) another big equity market rout.
In the coming months, however – based on emerging trends in the latest global (non-US especially) hard and soft economic data – the Fed will likely start hinting at adopting a tighter stance. Of course that assumes the right outcome on U.S./China trade negotiations and a friendlier experience with our European trading partners thereafter.