David Moenning�s Daily State of the Markets: 11/02
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Staying on the Path
As anyone with a pulse had expected, the Fed raised rates for the twelfth straight time yesterday. The move took the Fed Funds rate up to 4%, which, besides being a nice round number, is the highest level since June 2001, and is a level that most economists feel represents a "neutral" rate.
While everyone everywhere knew that we would see an increase in rates, the real question on investors� minds was if the Fed would give any indication that they were almost back to the trailhead After a very long walk down the now familiar measured path, many economists believe the Fed should be just about done on the hiking trail and eager to take a break. But, the language in the statement that accompanied the rate hike was once again little changed, and there were no material changes to the discussion of inflation or the economy. This makes it very clear that the Fed intends to stay on the path of measured rate increases and that we should prepare for another increase in December.
Turning to this morning, so far at least, it appears that traders are a bit concerned with just how much longer the Fed plans to extend its hiking outing. Stock futures are lower (Dow -21, S&P -2.20, NASDAQ -6.50) despite oil declining another -$0.25 to $59.60, which is a three-month low. Bond yields are creeping higher and would appear to be ready to test the highs for the year. The yield on the 10-yr is currently trading at 4.60%.
So with mixed signals on the economic front, the S&P hovering just below breakeven for the year, and the Fed on the verge of switching gears, it will be interesting to see if the bulls can continue to use the calendar to their advantage.
Stocks "In Play" This Morning:
TWX � Reports $0.19 vs. $0.17, increases repurchase plan
CI � Reported $1.94 vs. $1.62 and raises full year guidance
CSCO � Reports after the close, expected to meet earnings
DF � Missed earning expectations
PNRA � Beats by $0.01, ups guidance for year
BMY � Upgraded
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: CSCO
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
As anyone with a pulse had expected, the Fed raised rates for the twelfth straight time yesterday. The move took the Fed Funds rate up to 4%, which, besides being a nice round number, is the highest level since June 2001, and is a level that most economists feel represents a "neutral" rate.
While everyone everywhere knew that we would see an increase in rates, the real question on investors� minds was if the Fed would give any indication that they were almost back to the trailhead After a very long walk down the now familiar measured path, many economists believe the Fed should be just about done on the hiking trail and eager to take a break. But, the language in the statement that accompanied the rate hike was once again little changed, and there were no material changes to the discussion of inflation or the economy. This makes it very clear that the Fed intends to stay on the path of measured rate increases and that we should prepare for another increase in December.
Turning to this morning, so far at least, it appears that traders are a bit concerned with just how much longer the Fed plans to extend its hiking outing. Stock futures are lower (Dow -21, S&P -2.20, NASDAQ -6.50) despite oil declining another -$0.25 to $59.60, which is a three-month low. Bond yields are creeping higher and would appear to be ready to test the highs for the year. The yield on the 10-yr is currently trading at 4.60%.
So with mixed signals on the economic front, the S&P hovering just below breakeven for the year, and the Fed on the verge of switching gears, it will be interesting to see if the bulls can continue to use the calendar to their advantage.
Stocks "In Play" This Morning:
TWX � Reports $0.19 vs. $0.17, increases repurchase plan
CI � Reported $1.94 vs. $1.62 and raises full year guidance
CSCO � Reports after the close, expected to meet earnings
DF � Missed earning expectations
PNRA � Beats by $0.01, ups guidance for year
BMY � Upgraded
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: CSCO
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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