While trading activity picked up in the wake of heightened geopolitical risk, traders reminded that the looming Federal Open Market Committee meeting, economic fundamentals and bevy of speakers will keep the markets at bay.

Last week’s trading was a case of much ado about nothing, according to one trader, who said the weal GDP data, the marquee data release of the week, failed to stir up a great deal of interest. First quarter GDP rose at a 0.7 percent annual rate while the economy grew at a revised 2.1 percent pace in the fourth quarter. Economists polled by Reuters had forecast GDP rising at a 1.2 percent pace last quarter.

“The number was somewhat of a disappointment as we were looking for something better,” said a floor trader in New York. “Trump better find some magic in his bag to juice up the economy as he promised growth levels closer to 4%.”

In an interview on CNBC, Mohammed El-Erian said that the Trump tax reform/cut plan wouldn’t be enough to get the economy into a strong growth pattern, let alone 4%.

“Tax reform and the tax plan in itself is not sufficient to deliver 3 percent growth,” a baseline number the president and his economic advisors have said they at least want to achieve, El-Erian said.

“You need more,” he continued, such as the President’s promised $1 trillion in spending to upgrade the nation’s infrastructure systems.

On tax cuts, El-Erian said, “The most important part is when do we get the details — not just of the tax plan itself, but of how it’s going to move through Congress and get implemented.”

Another trader in the Midwest added that with the employment situation still “strong” this could give the market a brief pause as it (the DJIA) lingers below the 21,000.

“I don’t see the market moving higher from this point until we see some more substantive growth numbers,” he said.

But growth could mean inflation rearing its ugly head, he cautioned.

“Faster growth could, and I mean could, push the Fed back into action quicker and with more force than we’re comfortable with,” the trader said.

According to market pundits, the Federal Reserve is not expected to raise interest rates at its short one day meeting this week. That means the interest rate setting body only has seven more months to adjust interest rates – and market experts still agree there will be two more hikes this year. But the Fed is reticent to move rates close to the winter holidays and around election time, which could really crimp its ability to not jolt the financial markets with sudden and close in proximity hikes.

Trading this week was more active as 7.11 billion shares changed hands for the week ended April 28, compared with the 6.21 billion shares traded during the April 21 week, according to Bats Global Markets. The increase in volume was attributed to an increase in volatility due to North Kore concerns and the return of traders from spring break.

In other market news, ITG’s Jamie Selway was mentioned as a potential candidate to be the next Director and head of The Division of Trading and Markets at the Securities and Exchange Commission.

According to several media reports including the Financial Times and Reuters, Selway, currently head of execution services at agency brokerage ITG, is a front runner to head the Trading and Markets division at the U.S. Securities and Exchange Commission, Reuters reported, citing three sources familiar with the matter.

Selway declined to comment and it is not clear when a final decision or announcement will be made. The sources asked for anonymity because they were not authorized to speak with the media.

Selway’s pedigree as an expert on equity market structure, is well known throughout Wall Street. Selway co-founded broker White Cap Trading in 2003 and was on the board of directors at exchange operator Bats Global Markets from 2008 to 2015.

Also, in remarks given at the SIFMA Equity Market Structure Conference in New York last week, Randy Snook, Executive Vice President, Business Policies and Practices said that from SIFMA’s standpoint, the most current issue in equity market structure is the future of Regulation NMS.

Snook added that SIFMA is encouraged by the request for comment on Reg NMS from Acting SEC Chair Michael Piwowar.

“Equity markets have evolved considerably since Reg NMS was adopted. Now is a very appropriate time for the SEC to conduct a review,” he said. “Ultimately, SIFMA’s goal is to improve market resilience and ensure the equity market continues to benefit investors and play an essential role in capital formation.  And certainly, any changes to Reg NMS should maintain the benefits that investors and market participants have received – in particular the automation of markets and the improved trading experience for individual investors.”

Away from Reg NMS review and revision, Snook said there are four other areas that the advocacy group should be reviewed and looked into more deeply. First, he said the SEC should evaluate the Order Protection Rule to determine whether it is continuing to provide value or if increased market complexity is creating unnecessary market risk.

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Lastly, the SEC is reportedly preparing a proposal for a pilot plan to test how lowering stock exchange fees would affect market quality and the behavior of market participants, said David Shillman associate director of the SEC’s Division of Trading and Markets.

“We are working on it diligently,” Shillman said on the sidelines of a Securities Industry and Financial Markets Association conference, adding that there was no firm deadline to present a plan that would be put out for public comment.

An SEC advisory committee recommended the pilot in April last year.

Brokers have long complained that exchange “access fees,” which are capped at 30 cents for every 100 shares executed, are too expensive and are one of the main reasons so many orders are executed on private trading platforms that compete with public exchanges.

 

This Week’s U.S. Economic Indicators of Interest:

Monday	Personal Income ISM MFG Index Construction Spending
Tuesday	Redbook Retail Sales FOMC Meeting Begins
Wednesday	Gallop US Job Creation Index   ADP Employment Report   FOMC Meeting Announcement
Thursday	Jobless Claims   International Trade   Productivity and Costs   Factory Orders
Friday	Employment Report John Williams Speaks Janet Yellen Speaks Stanley Fischer Speaks James Bullard Speaks Charles Evans Speaks Eric Rosengren Speaks Consumer Credit