Step right up to the hot seat, Jerome Powell.

Investors from here to Hanoi can think of nothing else but the Fed chairman’s appearance on Capitol Hill Wednesday. The big question to be answered: Does Powell agree with the end-July quarter-point rate cut markets are pricing in, even after last week’s strong jobs data?

To be sure, the Fed could surprise markets with no move later this month, although this is seen as very unlikely by market participants. And as much as investors count on central banks to keep driving up equities, rate-cut rallies have proven short lived over the past 20 years, say some.

Looking for surprises? Watch the data, not monetary policy, says our call of the day from Elia Lattuga, the deputy head of strategy research at UniCredit. He doesn’t see the Fed straying too far from market expectations in coming months.

“The big question mark is what the data will tell us about growth over the next few months,” Lattuga told MarketWatch in an interview. His darkish view sees the U.S. edging toward a recession in 2020, with “significant” signs of that showing up by year-end. Pressure from global trade developments won’t help either.

“The data picture is the key driver in this environment for risky assets. We project a broadly flat performance for equities for the rest of the year, so limited upside potential. However, we see risks that a deterioration in the growth outlook affects risk appetite,” and possibly trigger a 10% drop for stocks, he said.

The big banks have been indeed growing cautious, and Lattuga doesn’t stray far from that playbook as he suggests investors cash in on some gains they’ve seen this year, and take a less aggressive stance for the latter half of 2019.

The strategist says fixed income is an attractive place to park cash in the coming months, and investors might want to add longer-term bonds given support from monetary policy. But they should take care with higher-yield, and often higher risk bonds, given how they often track equity markets closely, says Lattuga.

The market

Dow

YMU19, -0.20%

S&P

ESU19, -0.22%

 and Nasdaq

NQU19, -0.24%

  futures are lower, gold

GCQ19, -0.22%

and the dollar

DXY, -0.04%

are slipping, and oil

US:CLN19

US:CLN19

is climbing ahead of U.S. stockpiles data later.

Europe stocks

SXXP, -0.09%

are mixed, and it was the same for Asia

ADOW, -0.03%

The EU cut the region’s growth forecast again, while producer prices in China continued to slide toward deflation.

The economy

Prepared remarks of Powell’s testimony will be released at 8:30 a.m. Eastern, and he’ll appear at 10 a.m. Wholesale inventory data is due around the same time, with an appearance by St. Louis Fed President James Bullard and the minutes of last month’s Fed meeting coming later.

The chart

The mere idea of a U.S. recession is enough to stress out investors these days. Our chart of the day from @HayekAndKeynes, aka The Long View (blog can be found here) shows that since 1950, economic expansions have steadily left downturns in the dust. So relax, already.

The buzz

Shares of retailer Levi Strauss

LEVI, +2.03%

 are down after results showed costs climbing from an April IPO.

Boeing

BA, +0.56%

 shares are slipping after aircraft deliveries dropped 37% in the second quarter in the wake of two fatal crashes involving one of its key planes. European rival Airbus

AIR, +1.60%

 saw its deliveries jump.

Tesla

TSLA, -0.12%

  is up after reports the electric-car maker is planning a production capacity rise.

China says Vice Premier Liu He had a phone chat with U.S. Trade Rep. Robert Lighthizer and Treasury Secretary Steven Mnuchin on Tuesday evening. A CEO of a Chinese supply chain manager says it’s U.S. clients are anxious over that trade fallout.

Read: Banks should shine among S&P 500 stocks this earnings season

The quote

“We’re talking marketing dollars and branding, investment in the youth, investment in the players, investment in the coaching staff…I don’t think that that’s ever been there.” — Megan Rapinoe of the World Cup winning U.S. soccer team, on the fight for sports equality as New York gets ready to celebrate that victory.

Random reads

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Police in Chicago closing in on 4.5-foot alligator

U.S. customs seize JPMorgan-owned ship, busted weeks ago for a massive cocaine haul

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2019-07-10