(As of 7:20 am PST)
Stocks
hurried to the upside on what is shaping up to be an historic day on Wall
Street Wednesday. As Day 2 of the Federal Open Market Committee’s (FOMC) policy
setting meeting unwinds, expectations are that the Federal Reserve is set to lift
interest rates for the first time in over nine years. A forecasting tool, run
by the CME Group, has put the probability of a rate hike at 81%, nearly the
highest it’s been all year. In our opinion, a rate hike announcement could
initiate a year-end rally while lending support to stocks heading in to the new
year. At this point, a decision not to raise rates could backfire, like it did
in September when Fed Chair Janet Yellen surprised investors by holding off on
a rate hike. The decision is due by 2 pm Eastern time today, and will be
followed by a news conference with Yellen at 2:30 pm Eastern.
Economic news is mostly positive today. Housing starts jumped 10.5% in November
topping expectations, while building permits (a sign of future demand) also
grew ahead of estimates. Energy prices fell back today after two consecutive
days of gains, while precious metals and treasury yields rose ahead of the Fed’s decision.
International markets are also in the green taking their cue from Wall Street.
Stay tuned for this afternoon’s big announcement and check back in tomorrow for
our view on what this all means for YOU going forward.
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