Tuesday, December 10, 2013

Economic Journal - Tuesday, 12/10/2013

(As of 7:15 am PST)
 
Stocks are lower on another quiet session on Wall Street.  With little economic data out today, market direction is difficult to predict.  Taper speculation has increased following yesterday’s Fed speeches where comments seemed to suggest the central bank could very likely begin tapering out of its Dec. 17-18 policy meeting.  In a surprise move gold prices are higher by 2.5%.  In the past gold has been negatively correlated with the taper talk as a tightening of the loose money supply would be a negative for gold, traditionally viewed as an inflation hedge.  Perhaps we’re seeing a foreshadowing of the market’s reaction to the actual event of the taper and that it’s fairly priced in at this point.  In any case, the market has run up nicely at the end of the year and it wouldn’t be a surprise to see more profit taking as the week goes on.  In other news, European stocks are mixed and Asian markets finished lower on disappointing Chinese data.  Oil is up 1% on an expected drop in supply inventories.  Interest rates are down as is the US dollar.

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