Awaiting The FED
Sep 18, 2007 TTT.net Updates
The markets advancing ahead of the FED meeting that is to take place at 2:15PM that we’re hoping results in the rates being cut. Technically the DOW chart is looking very bullish as the short term consolidation pattern is breaking out to the upside. Though this could all change in a heart beat in the FED meeting this afternoon doesn’t go the way investors want it. Lets watch for what the FED has to say this afternoon.
Stocks Advance Ahead of Fed
Tuesday September 18, 11:18 am ET
By Madlen Read, AP Business Writer
Stocks Rise Ahead of Fed Rate Decision, Earnings and Benign Inflation Lift Investors’ Spirits NEW YORK (AP) — Stocks rose Tuesday as investors, heartened by upbeat earnings, awaited the Federal Reserve’s meeting on interest rates. The Dow Jones industrials rose about 100 points.Wall Street’s focus will be the central bank when it issues its decision on rates and its accompanying economic statement at 2:15 p.m. EDT. The slumping housing market, tightening credit market and volatile stocks have given investors reason to believe that monetary policy is in need of some loosening.
Most in the market expect either a quarter-point cut in the benchmark federal funds rate or a half-point cut, given last month’s decline in jobs and weakening retail sales. Equally important is how the Fed characterizes the housing, credit and stock markets’ drag on the U.S. economy, and if it suggests there are more rate reductions to come.As investors waited for the central bank’s decision, they were pleased to see economic and corporate data come in better than expected. Lehman Brothers Holdings Inc., the nation’s fourth-largest investment bank, posted a smaller-than-anticipated 3 percent decline in third-quarter profit compared to a year ago. Lehman is the first of the major U.S. brokerages to report earnings from the most recent, tumultuous quarter.
The Labor Department’s August producer price index was also more favorable than the market predicted. Wholesale prices fell 1.4 percent last month, the biggest decline in 10 months and led by a 6.6 percent drop in energy costs. Core inflation, which eliminates volatile food and energy prices, rose by a mild 0.2 percent, as expected.
“All of the cards have fallen nicely into alignment this morning,” said Phil Orlando, chief equity market strategist at Federated Investors, pointing to Lehman’s earnings, the benign PPI, and a calming third-quarter earnings outlook from Bank of America late Monday. But everything could turn when investors react to the Fed decision.
“They’ve dug in their heels for 50 basis points or bust on the funds rate, and my personal view is they’re probably going to be disappointed,” Orlando said. “The potention for a sloppy market reaction is certainly on the table.”
