Hurry Up And Wait

The market seems to be just biding its time here until the Fed meets at 2pm EST to announce its decision on interest rates. The market is pricing in a 25 basis point cut, with a 38% chance of a 50 basis point cut.

I doubt that the Fed will surprise the market with a 50 bps cut, even though they should. The Fed will almost assuredly cut 25 bps again at its next meeting, so why not just get ahead now?

As such, I expect that this overbought market will likely pull back after the announcement. Trying to time the market on a short-term basis is tricky, and usually futile. But I was surprised by yesterday's strength, which may have stolen the chances of a rally today. We shall see.

Fannie and Freddie are lower this morning, as is Washington Mutual (WM). Wamu cut its dividend to $0.15 per share from $0.56. Ouch. This has the stock trading down by nearly -9%, and is also weighing on the financial sector at large.

On the flip side, Texas Instruments (TXN) raised the low end of its guidance last night, saying that the outlook for wireless has improved. Also, AT&T announced it is raising its dividend by 12%.

Asian markets were higher across the board overnight. Oil is also higher, trading near $89.50.