Stocks Rise Ahead of the Big Bad Fed
Today's financial recap and tomorrow's financial outlook.
Overnight, Asian markets were relatively flat with the Japanese Nikkei 225 (INDEXNIKKEI:NI225) down 0.20%. News continued to surface from China that it was experiencing serious funding shocks in its banks, which spread fear into emerging markets. Emerging market stocks and bonds have been some of the worst performers this year.
,Great Britain's CPI was released this morning, with consumer inflation expanding 2.7% year over year, slightly better than the expected 2.6%. The British producer price index was also released, and both output and input came in slightly worse than expected. The FTSE 100 (INDEXFTSE:UKX) was up 0.69% on the day.
The US consumer price index showed year-over-year growth of 1.4%, inline with economists' expectations. Building permits fell slightly to an annualized rate of 974,000 from 1.005 million the month prior. Housing starts disappointed as well, with May annualized starts of 914,000 against the 955,000 expected. The drops in both permits and housing starts were due to sharp declines in multi-family homes.
Despite the less-than-stellar economic data, markets rallied in today's session in anticipation of the Fed announcements tomorrow. The S&P 500 (INDEXSP:.INX) finished the day up 15 handles to $1,654. Gold dropped more than 1% on the day, closing at $1,366 a troy ounce.
Last night President Obama said that current Fed Chairman Ben Bernanke has served "longer than he wanted or was supposed to" at the head of the Fed. This was taken as a clear signal that Bernanke would not pursue a third term once his current term ends at the end of 2013.Tomorrow's Financial Outlook
The EIA petroleum status report will be released at 10:30 a.m. EDT tomorrow morning.
The FOMC statement and economic forecasts will be released at 2:00 p.m. EDT tomorrow afternoon. This will be followed by a press conference with Bernanke at 2:30 p.m. EDT tomorrow. Investors will be watching these releases very closely for signs that quantitative easing will be tapered.
FedEx Corporation (NYSE:FDX) will be releasing earnings tomorrow. Earnings per share are expected to come in at $1.96 with revenue of $11.46 billion.
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