(As of 7:10 am PST)
Stocks are retreating after yesterday’s rally as
investors digest Fed decision to taper bond purchases. At 2 pm EST yesterday markets were greeted
with a statement from the FOMC signaling that the Federal Reserve would begin
tapering back its asset purchases to the tune of $10 billion a month starting
in January. Markets cheered the decision
and welcomed the Fed’s increasing confidence in the US
economy. Investors also cheered the
accommodative stance signaled by the central bank by its assurance that short
term interest rates would remain low through and beyond the tapering
process. As far as the scale and pace at
which the Fed will cut back its $85 billion-per-month stimulus program,
Chairman Ben Bernanke stated those decisions would remain data dependent. It was quite an afternoon for the markets and
for Mr. Bernanke who answered questions about the Fed’s decision in a nearly 2
hour press conference, his last as chairman of the Federal Reserve. Economic reports today are slightly
disappointing. Jobless claims rose to
their highest level since March and US existing home sales declined for the
third straight month in November. A
sharp move downward for gold has investors attention, with the precious metal
breaking through $1200 per ounce as the Fed taper sinks in. Interest rates and the US dollar are also
moving higher with the 10 yr. treasury approaching 3%.
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