Written by Gary
The countdown begins for the Fed’s rate decision at 2pm today. From the looks of today’s markets rising, investors are betting that there will be no change until December.
What I am counting on is a VERY volatile 5 minutes where the averages make wild swings and eventually settle, more or less, where they were prior to the announcement.
Here is the current market situation from CNN Money | |
 | North and South American markets are mixed today. The IPC is up 0.46% while the S&P 500 gains 0.22%. The Bovespa is off 0.03%. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Global Markets Await Fed DecisionU.S. stocks were little changed on Thursday ahead of a decision from the Federal Reserve due later in the day on whether to raise interest rates for the first time in almost 10 years. |
| What a Fed Interest-Rate Change Could Mean for Your WalletSee how consumers’ savings and borrowing rates could change if the Federal Reserve raises its target rate. |
| Verizon says earnings may ‘plateau’ in 2016 (Reuters) – Verizon Communications Inc said earnings may “plateau” next year as evolving consumer habits drive changes to its wireless business model and as the telecom company forays into new markets such as mobile video amid stiff competition. |
| Deutsche Bank posts announcement on closure of some Russia ops MOSCOW (Reuters) – Germany’s Deutsche Bank posted a statement on Thursday saying it would close its corporate banking services and securities business in Russia, where it has been hit by sanctions, a downturn and investigations into share trades. |
| Looming Fed rate decision a test of Yellen’s jobs vision WASHINGTON (Reuters) – Fed Chair Janet Yellen has made clear she would rather delay an interest rate hike for too long than move sooner and risk jeopardizing a tepid economic recovery, a conviction that will face its sharpest test yet on Thursday. |
| Wall St. higher at midday as Fed decision looms (Reuters) – U.S. stocks were higher in thin midday trading on Thursday, with investors hanging fire ahead of the Federal Reserve’s interest rate decision later in the day. |
| Cargo Trends Affirm Falling Oil ProductionSubmitted by Nilofar Saidi via OilPrice.com, Waterborne shipments of crude and condensate have been heading in one direction since the beginning of the shale revolution: up. That statement is no longer true. Nearly halfway through the month, and September loadings are more than 200,000 barrels per day lower than during the same period last year.
All Waterborne Loadings (source: ClipperData) Waterborne volume is the last to be added and the first to be cut. A drop in domestic waterborne volume is the first firm indication of lower production, because the waterborne barrel is the hardest and most expensive one to move. According to the EIA, U.S. production peaked in April at 9.6mn bpd, which coincides with the peak in shipped volume at 1.8mn bpd. Since then, shipments have slid slowly, but the drop became precipitous this summer and is gathering momentum. There has also been a sharp slowdown in crude-by-rail traffic, evident in the volumes reaching the Mississippi River and the rail-to-barge terminals on the coasts. Pipeline volume is likely the most resilient, but judging by September’s waterborne numbers, is also likely to be lower. The full extent of the decline in shipments has been obscured by the explosive growth in condensate exports, which flattered this year’s numbers. As ClipperData has been reporting since June, condensate exports have now slowed, also highlighting the extent of the drop in liquid hydrocarbon production and shipment. The volume decrease, especially in the Gulf, points to further downward revisions in the EIA production numbers, especially since the … |
| Oil falls in volatile trade ahead of Fed rate decision NEW YORK (Reuters) – Brent and U.S. crude futures fell on Thursday in volatile trading as investors awaited the Federal Reserve’s interest rate decision later in the day. |
| Wall Street Has Doubts About Fed Lifting RatesWall Street is skeptical that the Fed will raise short-term interest rates, underscoring doubts about the health of the global economy. |
| Did Hilsenrath Just Leak The FOMC DecisionUsually we are impressed by the velocity with which Fed mouthpiece Jon Hilsenrath prepares his FOMC reaction digest while under embargo, often penning more words in the allotted 15 or so minutes than are even in the Fed’s statement. However, he traditionally comments right after the FOMC announcement. We wonder if moments ago, Hilsenrath – who does not have a twitter account – did not leak the FOMC statement before its actual unveiling in just under 2 hours when via WSJ colleague Greg Ip’s Twitter account he said:
To be sure, a very well-timed tweet. And then, perhaps to confirm, on WSJs new central bank pro section he added that “It would be out of character for Janet Yellen to surprise the market” noting that he ran into “some New York Fed guys and they looked relaxed.” Finally, here he is on Fox Business banging the anti-rate hike drums starting early in the morning: Watch the latest video at video.foxbusiness.com So did Hilsenrath just “prepare” markets with a two hour advance notice of what to expect? Or did he simply add to the Fed’s communication failure by “hinting” the market to expect one thing, while Yellen will unveil the opposite? Not even Gartman has the answer to that. * * * The market reacted… |
| 9 Market Scenarios As Goldman Warns Stocks Are “Vulnerable”Goldman Sachs said yesterday that financial markets are vulnerable because nobody can agree on what the Fed will do. While equity investors have been anticipating this moment with all the excitement and tension of a prizefight, as Bloomberg reports, bets on the outcome from the Federal Reserve’s rate decision are far more complicated than simply “win or lose” for stocks. Amid the tumultuous background, here are predictions of nine money managers and strategists on what to expect this afternoon… 1) Crisis of Confidence The Fed would be well-served to raise rates on Thursday to avoid a crisis of confidence among investors, according to Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania. Market participants may see central bank inaction as a signal of concern over global economic growth, he said. “If the Fed doesn’t do anything, it lends a bit more fear to the market that things are worse than expected,” he said. “In a funny way, the fact that they wouldn’t raise rates would send a little bit of concern into the market. It may not be the most well-received type of movement.” 2) No-Win Situation To Kim Forrest, an analyst at Fort Pitt Capital Group Inc., which oversees about $1.7 billion in Pittsburgh, the stock market is doomed to fall no matter what the Fed does. With that in mind, the Fed should “just rip the band-aid off,” according to Forrest. “It’s going to sell off either way because there’s so much tension built up into this,” she said. “If for some reason the Fed decides whatever the magic data is doesn’t exist right now, … |
| Rate Increases Help Banks FirstWhen the Federal Reserve ultimately raises interest rates, banks will get more out of it than savers will. |
| Gold Up Before Federal Reserve — Myth Of All Powerful Central Bank ContinuesGold Up Before Federal Reserve — Myth Of All Powerful Central Bank Continues Gold rose 1.3% yesterday ahead of the Federal Reserve interest rate announcement today. Markets remain divided and uncertain whether the Fed will increase rates by 25 basis points today (1900 GMT). The Fed last raised interest rates in June 2006, by 25 basis points to 5.25%, shortly after that America’s central bank found itself reducing rates and since December 2008 the Fed’s benchmark interest rate has been set between 0.0% and 0.25%. Gold prices rose in the months after the interest rise and were 23% higher in 2006.
Lower than expected U.S. inflation numbers yesterday eased fears the Fed will hike interest rates later this session. The dollar came under pressure today after the weak inflation data led traders to pare bets that the U.S. Federal Reserve will deliver an interest rate hike. The ‘will they or won’t they’ speculation is rife and all consuming in markets. The Fed will hold rates near unprecedented historic lows at 0.25% and not have its first interest rate rise in nearly a decade, according to a little over half of economists in a Reuters poll who only last week narrowly predicted the Fed will increase rates by 0.25% today. Since last week’s poll, five economists have changed their prediction for a hike and now expect the Fed to keep rates at 0.25%. None changed their view from a hold to a hike, suggesting that m … |
| U.S. jobless claims at eight-week low; housing starts fall WASHINGTON (Reuters) – The number of Americans filing new applications for unemployment benefits fell last week to the lowest level in eight weeks, suggesting the labor market continued to strengthen despite the recent tightening in financial market conditions. |
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