Daily Market Update – October 28, 2015 (Close)
Following Monday’s pretty unexciting day, yesterday wasn’t very different.
This morning’s pre-opening futures trading in advance of this afternoon’s FOMC Statement release isn’t looking any differently either, as the gains of last week are still being digested and may have given traders a reason to not do their anticipatory and celebratory buying on Monday and Tuesday, ahead of the FOMC.
No one expected the FOMC to announce a rate cute, although just a month ago, prior to the last Employment Situation Report, most of those people were getting prepared for an October rate increase and were beginning to see that increase as being a positive thing.
That all changed a month ago and the rate increase was again being viewed as a negative for markets. Those employment numbers made most traders believe that an imminent rate increase was going to be less likely.
As long as markets are still practicing that kind of mentality, you would be left to believe that at some point they would have to express their disappointment when the FOMC finally decides to act. Ultimately, though, the realization has to again be that the longer the FOMC doesn’t act, the more negative of a picture that has to be painting about the health of the nation’s economy.
That disappointment could also be expressed if the FOMC simply changed some of the nuanced wording that it uses to accompany their brief policy decision statement. Any wording that suggested that the rate increase is really coming soon, or even any expression of disappointment in the slow rate of the recovery having precluded an interest rate increase to date, could have brought out the sellers.
Or at least so I would have thought.
Those sellers have been on a break for the past 4 weeks as buyers have taken center stage and almost completely set aside the correction that had occurred.
Tomorrow will be the GDP release, and regardless of the FOMC’s decision today, especially if it offers nothing new in policy nor in content, could get people back in heightened expectation mode for an increase at the following FOMC meeting.
That game has been going on for the entirety of Janet Yellen’s tenure and it never seems to get old.
As the day developed though, it went from a nice gain heading into the FOMC Statement and then plummeted 143 points in 18 minutes immediately after the statement’s release. only to erase that loss and then add on 210 points to finish the day just slightly less than 200 points higher.
I guess traders didn’t follow my logic and respond negatively to the idea that rates could go up in December.
With a couple of new positions opened this week and a decent number of ex-dividend positions for the week, I didn’t expect to be parting with too much more money, although I did still have some interest in Seagate Technology ahead of their earnings this week and their ex-dividend date next week.
Otherwise it’s going to likely be a situation of awaiting the FOMC’s decision and hoping to get some assignments, or at the very least some rollovers of those scant 2 positions expiring this week and finally couldn’t resist expressing that interest in a tangible way.
Now that today is done, we can set our sights on the upcoming earnings from retailers and perhaps finally get some idea of what may be going on with the real drivers of the economy. A strong showing in retail could demonstrate that consumers are back and finally give some reason to look forward to 2016, not in fear of that rate increase, but rather in anticipation of growing corporate revenues for a change.