Daily Market Update – November 28, 2016 (9:00 AM)
This is likely to be the week that will confirm what the FOMC will do as they convene for their final meeting of 2016.
A year ago at this time, with whatever predicting power the members of the FOMC may have, they would never have predicted that there would not have been any interest rate increases prior to the final few weeks of 2016.
Their power to predict back at this time a year ago, was likely over-estimated.
Nonetheless, here we are.
This week we have a GDP Report and an Employment Situation Report and those should be the final bits of the equation.
You would have thought, though, that the FOMC would have been ahead of the curve.
Not only are those upcoming reports likely to suggest an ever strengthening economy, but the bond market has already effectively raised rates.
Just ask anyone in mid-mortage application.
With a decent amount of cash to begin this week and no expiring positions, I would ordinarily be interested in adding some new positions, but I do have 4 ex-dividend positions this week.
That may be enough reason to sit on the sidelines, but I think that if the GDP and the EMployment SItuation Report do point at a near certain increase from the FOMC, the response from investors may be a very positive one.
At least for now.
That’s what happened in 2015.
This time, though, I think it may continue for a while, as long as the increase is only 0.25% and the wording from the FOMC doesn’t suggest that another increase is right around the corner.
With that belief that there may be more to go on the upside, I’ll be looking for any opportunity this week, but will also be looking ahead for any chance to rollover positions expiring in a few weeks as the December 2016 option cycle comes to its end and I get ready to close out the books for the year.