Daily Market Update – September 14, 2016 (7:30 AM)
Yesterday wasted Monday’s great recovery, as investors once again showed just how much they don’t like the idea of an interest rate hike next week.
There was nothing redeeming about yesterday’s trading and there was really no news to have supported the kind of reaction the market had.
We’re now in the quiet period one week ahead of the FOMC meeting, where members seem divided as does opinion.
While everyone is focused on deciding whether the interest rate hike will come in September or December, what is forgotten is that the FOMC has said that such an increase could come at a time other than a regularly scheduled meeting.
That would really take people by surprise, but it would get us over this really insignificant decision by the FOMC, at least as far as investing goes.
A 0.25% increase in rates isn’t likely to divert too much money away into some other kind of investment, as offering a better reward for risk.
Meanwhile, an increasing interest rate environment would reflect a growing economy and stock prices are traditionally based on earnings, so that can’t be a bad thing.
With a number of positions expiring this week, I hope that there’s some rebound over the next few days so that those positions can be in play for either rollover or assignment.
Either would suit me just fine at this point.