Back to the Wall of Worry impacting investors. Last night we discussed the issue related to the FOMC statement and how the speculation is now in play that the Fed may cut stimulus as early as December versus March. The in turn has pushed interest rates higher, the dollar higher, interest sensitive stocks lower and broad markets sideways to slightly down. The last hour rally on Friday helped ease some tension heading into the weekend, but the worry bus has left the station and unless someone of importance puts out the sparks they may turn into a fire. That is what next week will be all about.
The economic data was better again today with the ISM Manufacturing data at 56.4% versus 56.2% for September. The estimates were 55%. Thus, we don’t have to listen to the shutdown stories relative to the government. This followed up on the positive data on Wednesday from the Chicago PMI which was much better than expected. The jobs report was pushed to next Friday to prepare a good story for the report. Good news relative to the economy helped keep the sellers at bay again on the day .
All the work did on the 30 year mortgage rates since September is being reversed on the cut rumors for December. The 3o year bond moved to 3.7% today as the fear factor creeps back into the yields. This is causing some ripple effect selling across the interest sensitive sectors. It would be nice if the Fed would just come out and raise rates by 50 bps on the overnight Fed Funds Rate and get this show on the road. Yes, rates would move higher short term, but at least we would know what we are dealing with versus the constant whining about the jobs data, etc. Enough!
Don’t forget the weekend update will be posted on Saturday with our recap of what happened and where we are going next week with our outlook. The tables will be updated and the watch list refreshed based on the scans. If you are signed up for the RSS feed notification you will be notified when the update is done. If not log on Saturday afternoon or Sunday to review the information as well as the video that has some trading education as well.
Next Tuesday at 6 pm EST is our next Trading Webinar!!! Sign up now to reserve your spot it promises to be informative with some additional trading ideas for the current market environment.
Have a Great Weekend!