Markets Up Slightly, Anticipating No-News Fed Report
Wall Street opened up slightly this morning, as traders await the report on the Fed's two-day meeting due out this afternoon that likely will tell us ... nothing.
In the first 15 minutes of trading, the Dow was up less than half of 1 percent, as was the broader S&P 500.
The tech-heavy Nasdaq was up about six-tenths of 1 percent.
In its report this afternoon, the Fed is widely expected to leave interest rates alone, right at their historic levels. Traders will be parsing the report and reading between the lines and holding it up to the light and looking at it sideways to try to ascertain whether the Fed is is telegraphing a rate hike anytime soon. This will be as hard as translating the Rosetta Stone. And nearly as important.
Some traders think that the markets have squeezed everything out of this rally, which began in early March, that they can.
That doesn't necessarily mean the markets will dive again, but instead could move "sideways" -- trading within a narrow range -- for the next several months as the economy tries to sort itself out.
Why? Because it's unlikely that the markets would a) continue their 40 percent surge since March anyway, and b) continue to rise much at all until the economy gets better.
And by that, we mean: unemployment leveling off, housing prices starting to tick up again consistently and consumer confidence turning around. Given that unemployment has continued to rise for months after each previous recession has ended, it seems unlikely those three conditions will kick in until 2010.
August 12, 2009; 9:49 AM ET
Categories: The Ticker | Tags: Dow Jones, nasdaq, s&p 500
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Posted by: Dermitt | August 12, 2009 10:03 AM | Report abuse
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