Two Ways to Play: Will FOMC Throw in a Surprise?
Strengthen your portfolio in good times and bad.
The Federal Open Market Committee will release its interest rate policy decision today at 2:15 EST. And although a rate hike isn't imminent, investors will be parsing through the statement for any language that could hint at a future increase.
An Associate Press article says Chairman Ben Bernanke and his colleagues are likely focusing on how to properly telegraph a future rate hike. The overnight Fed Funds rate has been held at a record low, near zero, since December of 2008. The Fed said it will commit to this policy for an "extended period." But many economists think that means at least six months or more and feel the FOMC could drop that phrase altogether.
From the Bull Pen: Consider that the Obama administration wants to pay homeowners to sell at a loss, and whether that is a sign of a robust economy. If not, then an easy Fed is the likely scenario. Momentum players will like the extra juice in stocks like Express Scripts (ESRX), which is coiling below $100. A sell stop can be set anywhere from 2% below entry or below $95.
From the Bear Cave: With so many bears looking for a tough Fed and the S&P 500 (SPX) hovering below resistance, it may be a tough time to short. But the sharp reversal in New Oriental Education (EDU) could signal trend exhaustion. A buy stop can be set above the $86 high.
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A Quick Check Around the World
Asian trading closed with the Nikkei -0.28%, India 1.27%, Hang Seng -0.27%, Shanghai 0.53%, and Taiwan 0.80%.
Across the pond, we see the FTSE 0.56%, DAX 0.76%, CAC 0.93%,
As of 8:20 AM EST, S&P Futures are trading +1.750 to 1147.500 Nasdaq futures are +3.250 to 1920.25.
A Look at Commodities
Over in commodities, crude oil is +0.19 to 79.99 while gold is +7.300 to 1112.70 this morning. Silver is +0.142 to 17.250 and copper +0.0325 to 3.3475.
The dollar Index is -0.2100 to 80.2950.
On the Radar
08:30 Building Permits 614k cons.
08:30 Export Prices ex-ag
08:30 Housing Starts 587k cons.
08:30 Import Prices ex-oil
02:15 FOMC Rate Decision 0.25% cons.
Click here for the full trading radar.
Good luck today!
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