(As of 7:25 am PST)
Stocks are lower this morning
on worries that the Federal Reserve might start reducing its government bond
buying program as early as September of this year. This reduction in economic stimulus has been
widely telegraphed over the last year, but it is still making investors
nervous. Much of the huge stock market
gain we have experienced over the last few years is a result of economic
stimulus so we might see some market giveback even as the US economy picks up
speed. Corporate profit reports were
also disappointing. Disney beat
expectations, but indicated that a large loss on its recent movie bust ‘The
Lone Ranger’ will cut into future profits.
In other news, the US Justice Department filed a civil suit against Bank
of America, citing fraud in its packaging of mortgaged backed securities prior
to the financial crash of 2008. Gold and
oil are near unchanged and the US dollar is mostly down against other
currencies. Interest rates are
stable. Expect continuing weakness as
the day wears on.
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