Fed Tapering To Begin: How will it impact the financial markets?

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Broad US markets are relatively flat this week in anticipation of the Fed meeting minutes that are coming out later today. It has been largely reported that the Fed is expected to reduce its bond purchases down to $75 billion starting this month. What most analysts are looking for coming out of the Fed meeting is how optimistic the Fed is for 2014 and whether they expect to entirely wind down monthly bond purchases to nothing by the end of the year. The ADP US nonfarm private sector employment report came out this morning noting an increase of 238,000 jobs from November to December.

 

"Investors are now wondering if tapering will occur consistently throughout the year to the point that there will no longer be a bond purchasing program at year-end,” said David Krein, Managing Director of NASDAQ OMX Global Indexes. “The recent upbeat jobs report might give Fed officials more confidence that the markets are ready for tapering to increase".

 

 

TOP WEEKLY INDEX MOVERS (+ / -)

 

LEADING INDEX MOVERS: 01/03/14 - 01/08/14
(@12PM)
NASDAQ INTERNET INDEX (QNET)2.83%
NASDAQ BIOTECHNOLOGY (NBI)2.27%
PHLX SEMICONDUCTOR (SOX)1.52%
NASDAQ GLOBAL HEALTH CARE INDEX (NQG4000) 1.27%
PHLX DEFENSE SECTOR (DFX)+1.23%
 
LAGGING INDEX MOVERS: 01/03/14 - 01/08/14
(@12PM)
PHLX OIL SERVICE SECTOR (OSX)-0.97%
PHLX GOLD/SILVER SECTOR (XAU)-0.65%
NASDAQ OMX GLOBAL WATER (GRNWATERL)-0.56%
NASDAQ GLOBAL CNSMR GOODS INDEX (NQG3000)-0.47%
PHLX HOUSING SECTOR (HGX)-0.43%

 

INDEX TO WATCH

  • PHLX GOLD/SILVER SECTOR (XAU) was down -0.65% as of noon on Wednesday from the most recent Friday close. The price of gold was $1220.80 an ounce.
  • NASDAQ BIOTECHNOLOGY (NBI) was up 2.27% on the heels of the index’s best year in the past decade.
  • NASDAQ INTERNET (QNET) is up 2.83% amid speculation surrounding internet advertising revenue increasing in 2014 and beyond.

OTHER NOTABLE INDEX MOVES

  • The December auto sales report was released with dismal figures. Look for auto to rebound by tracking NASDAQ OMX Global Automobile (QAUTO), which is up 35% year-over-year.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Nasdaq.com Blog , Nasdaq.com Blog , Commodities

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