(as of 7:00 AM PST)
Markets are up to start the day, but no one seems to know why. Perhaps the new Euro Bank Bond buying program is pumping liquidity into the market. Data is not that impressive and corporate profit projections for the next quarter continue to be reduced with current analysts projecting a meager 1% profit growth. If history is any indication, the reduced profit growth will warrant a lower price to earnings ratio for markets, which means that we might see a significant pullback as companies start to announce results next quarter. There is tumult going on in the currency markets since the Federal Reserve issued somewhat of an about face on interest rate projections. The dollar has fallen sharply from highs established only this last Tuesday and it seems that perhaps key Fed and Treasury officials feel that the dollar has come too far too fast and are making unseen and unspoken adjustments. Gold and oil are both up on dollar weakness. Interest rates are on the decline with the 10 year treasury yielding under 2%. Today is an options expiration date so there might be added volatility as the day wears on. Markets might give back current gains as investors site a lack fundamental data for the rally.
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