With just about an hour before the Fed releases its notes, and just about 1.5 hours before Janet Yellen holds her press conference, the market is holding steady in the red. I am not sure what it wants to hear, but the tension is palpable.
- The Federal Reserve on Wednesday is expected to lay the groundwork for its first interest rate hike in nearly a decade, as it continues to weigh whether the U.S. recovery can hold up against collapsing oil prices and a soaring dollar.
In the meantime, Greece is still squawking and the IMF and the EU are fighting with the tiny economy. It is all so silly, as far as the market is concerned.
- Greek Prime Minister Alexis Tsipras lambasted European partners on Wednesday for criticizing a new anti-poverty law hours before it is voted on, saying it was the euro zone rather than Athens that must stop “unilateral actions” and keep its word.
Netanyahu pulled a hard-right victory today, and as far as the market goes related to the Middle East, this is really bad news. The man had to abandon his commitment to a Palestinian state, just so he could pull in all the furthest of the furthest right to vote for him. Just goes to show you what pandering can do.
With all of this news out there and with expected outcome of the Fed meeting already broadcast, there is nothing to do but wait. You should consider three things while waiting, though.
- Stocks on Wall Street slipped and shares in Europe rose on Wednesday, reflecting a policy divergence between the Federal Reserve and the European Central Bank, while oil prices fell as data indicated U.S. crude inventories were at a new record high.
- The dollar slid against most major currencies on Wednesday as investors continued to pare back over-extended greenback positions ahead of a key U.S. Federal Reserve statement later in the day following the Fed’s two-day policy meeting.
First, European markets rising is so much better news than anything the Fed has to say, as we all know what they will do come mid-year – raise rates.
Second oil dropping is still more good news for the US and global economy, and when you pare that with the pressure on the US Dollar easing well …
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We’ll talk tomorrow after the Fed has had its say, for whatever that is worth.
Trade in the day; invest in your life …
