Markets are in a rally mode
this morning with news dominated by Larry Summers, the Presidential favorite to
succeed Ben Bernanke as the head of the Federal Reserve Bank. Summers removed his name from
consideration. The markets are rallying
because there was concern that Summers as the Fed banker would cause a sharp
change in direction including a reduction of economic stimulus. Other names under consideration would
seemingly maintain the loose monetary status quo. Gold is up moderately after hefty declines
last week, while oil is down sharply on easing tensions over Syria. Apple continues to fall on negative news from
its China operations. The Federal
Reserve Bank meets this week and it is widely expected that a tapering of the
85 Billion dollar per month will be a likely outcome.
How markets react will depend on the magnitude of the purchasing
cutback. Volatility is likely to pick
up on Fed watching and political wrangling over the US debt ceiling.
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