Two Ways: Your Move, Bernanke
Strengthen your portfolio in good times and bad.
The Federal Open Market Committee concludes its 2-day meeting today with the release of a statement at 2:15. With interest rates effectively at zero, most aren't expecting any news vis a vis the overnight federal funds target rate. But what market participants are watching for is whether the Fed will boost purchases of Treasuries and mortgage-backed securities.
According to Bloomberg, Chairman Bernanke and his colleagues have been counting on revived growth through the purchase of as much as $1 trillion in asset-backed securities, $1.45 trillion in mortgage debt and $300 billion in long-term Treasuries. However, with some signs of economic recovery in place (i.e. the slowing pace of decline in home prices), some believe the Fed may hold back.
See FOMC: Yellow Metal to Get More Precious? by Professor Lance Lewis for more.
From the Bull Pen: Quite a pickle the Fed finds itself in. With yields on the 10- and 30-year notes climbing to new highs, it may feel forced to push rates down. Equity traders can consider playing the 20+ Year Treasury ETF (TLT) with a 2-point trailing stop.
From the Bear Cave: The best shot for the Ultrashort 20+ Treasury ETF (TBT) may be after the announcement. But one can also look to the Currency Shares Euro ETF(FXE). A sell stop can be set near $129.
Quick Check Around the World
Asian trading closed with the Hang Seng 2.76%, India 3.65%, Shanghai 2.78% and Taiwan 0.31%.
Glancing towards Europe, we see the CAC 1.20%, DAX 0.96%, FTSE 1.17%
As of 7:50 AM EST, S&P Futures are trading +7 to 855.16, and Nasdaq futures are +10 to 1361.92.
A Look at Commodities
Over in commodities, crude oil is trading +0.89 to 50.81 while gold is +3.5 at 897.10 this morning. Silver is +0.120 to 12.520 and copper +4.81 to 196.40.
The dollar index is -0.6950 to 84.6300.
On the Radar
08:30 GDP-Adv. -4.9
08:30 Chain Deflator Adv. 1.7%
10:35 Crude Inventories
02:15 FOMC Rate Decision
Click here to see the full trading radar.
Happy hump day! Good luck!
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