Two Ways: Fed Fund Rate Likely to Stay Put
Strengthen your portfolio in good times and bad.
Not much should happen today until the release of the FOMC (Federal Open Market Committee) statement at 2:15 PM EST. According to Bloomberg, the Federal Reserve is likely to signal that the US economy has begun to recover, but still promise to keep the Fed funds overnight interest rate near a record low for an "extended period."
The central bank has kept the benchmark lending rate at a range from zero to 0.25% since December and adopted an asset-purchase program as its main policy tools. But even as economist project 2.9% growth in the quarter -- which is up from a 1% estimate back in July -- many believe the Fed will continue to provide a helping hand to ensure a durable recovery.
For more, see Mike Mish Shedlock's When Will the Fed Start Hiking?
From the Bull Pen: As Professor Lance Lewis noted yesterday on the Buzz, keep in mind the Fed let 10 straight quarters of positive GDP go by before it finally acted on the Fed funds rate. Nonetheless, "stuff" plays could still continue their upside trend. Look at the Steel ETF (SLX), which bounced off its 10-day moving average. Sell stops near $53 could be prudent.
From the Bear Cave: Bears looking for downside plays can keep an eye on Home Depot (HD), which didn't participate in any of the "fun" from Turnaround Tuesday. The stock did get a bounce off of its 20-day moving average, but watch for more downside follow through. If it happens, consider using a 2% buystop above entry.
A Quick Check Around the World
Asian trading closed with the Nikkei (Closed), India -0.99%, Hang Seng -0.49%, Shanghai -1.89%, and Taiwan -1.24%.
Across the pond, we see the FTSE 0.32%, CAC 0.16%, DAX 0.21%
As of 8:20 a.m. EST, S&P Futures are trading +2.50 to 1069.75 and Nasdaq futures are +5.000 to 1739.50.
A Look at Commodities
Over in commodities, crude oil is -0.21 to 71.55 while gold is +0.90 to 1016.00 this morning. Silver is +0.40 to 17.16 and copper -6.250 to 279.00.
The dollar index is -0.0550 to 76.3000.
On the Radar
10:30 Crude Inventories
02:00 FOMC Rate Decision
Click here for the full trading radar.
Happy Hump Day! Good luck!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter