The remainder of this week’s trade will likely be centered on the Fed meeting and policy statement. Markets have reached a possibly pivotal point up near highs. Ahead of today’s Fed announcement, trade has appeared nearly mundane and directionless. After today’s announcement, the tone and timbre of the statement will probably color trading for the next few weeks even if the initial response is a non-event.
No shockers are expected from the close of this two-day meeting. Members will likely reiterate their pledge to keep interest rates low in the hopes of maintaining a public eager to spend. Sentiments which echo the confirmation of economic recovery being underway will likely also be a part of the overall theme, but they will probably come with disclaimers. No one wants to commit 100 percent to recovery talk when the lousy employment statistics are still dragging things down. Secure jobs and new job growth are probably still key to a complete recovery package. On the flip side of the statement, any talk of tightening or signs of destabilization could set stage for correction especially if there is any hint of raising interest rates in the near future.
Overall, euphoria has been carrying equities to fresh highs and any money managers who are eager to jump on the bandwagon if they missed the initial move could continue to take things higher. At this point, it is beginning to feel like things are shooting well beyond estimates and the possibility of a recovery rebounding. Instead, it feels like fundamentals have been set on a shelf for now. The DJ will likely try to hit 10000 while the S&P aims for 1100. Be wary of the US dollar movement and its recent appearance of a tight inverse correlation to commodities and equities. If this market can hold at 76, it could take wind out of the sails on some of these rallies.
Past Performance is Not Indicative of Future Results.
Past Performance is Not Indicative of Future Results.
Disclaimer: Futures and options trading involve substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results.
