There was a sigh of relief as
the markets opened positive this morning.
While opening gains have been shrinking, there is a remembrance of the
strong positive momentum from last year.
The US GDP number came in at a solid 3.2% growth rate. The biggest concern today was how markets
would react to the further reduction of the Federal Reserve’s tapering program. The bank reduced its government bond buying
from 75 billion to 65 billion. The
reduced liquidity has been wreaking havoc on some emerging global
economies. US home sales continued to
show weakness in December, down over 8%.
With most of the data we are
seeing coming in negative, the positive market returns are a pleasant surprise
and likely indicate that the market has been oversold over the last few
days. Gold is taking a beating this
morning on taper concerns, while oil is up moderately. Today is a big day for earnings announcements
and they will likely dictate market direction as the day wears on.
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