The Fed meeting this week remains the dominant issue for the
markets, with investors unable to handicap whether the FOMC will
announce the 'Taper' decision on Wednesday or blink once again as
they did back in September. Minutes of the September FOMC meeting
showed that decision to be a close one and this week's decision
will likely be no different.
Pre-open sentiment today remains positive after a number of down
days, with markets in Europe up on favorable factory sector data
and Asian markets responding negatively to underwhelming PMI
numbers out of China.
The two-day FOMC meeting getting underway on Tuesday will also
bring the members' updated economic forecasts and the Bernanke
press conference Wednesday afternoon. Today's positive pre-open
mood notwithstanding, markets have been weak lately on concerns of
greater Taper odds this week. The bipartisan budget deal that was
approved by the House last week and is expected to receive the
upper chamber's nod this week, statements to the contrary from a
number of GOP senators notwithstanding, is helping remove the
fiscal overhang that was supposedly a concern for the FOMC at the
The Fed is obviously in the spotlight this week, but we have plenty
of housing sector data and a number of earlier Q4 earnings reports
coming out this week.
) are among the more notable earnings releases this week, while
Housing Starts, Existing Home Sales, and the homebuilder sentiment
index will give us the housing sector's pulse. CPI, Industrial
Production and the read on the Q3 GDP are the major economic
reports on tap this week.
A lot is happeninig in this final major week of the year, but
whether the market will revert back to its historical seasonal
behavior or not will be a function of what the FOMC does Wednesday
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