Hurry Up And Wait

The FOMC will announce their interest rate decision this morning, and it should be a big market mover either way. The fed funds futures were pricing in a 78% chance of a 50 basis point cut. It used to be that the Fed didn't want to upset the market when expectations were this high, but with Bernanke, I am not so sure.

4Q GDP came in below expectations at +0.6% (vs. +1.2% consensus), so this provides some support for the Fed to go 50 bps today, as this reading is pretty weak.

Conversely, the ADP payrolls report showed the private sector added 130,000 jobs, not the stuff recessions are made of. And several industrial companies' managements have said that they think Wall St. is crazy with all of this recession talk. So how's that for a mixed message?

Asian markets were lower overnight. Oil is up slightly, near $92, but most oil stocks are lower. The only group bucking this morning's weakness is the broker sector. The 10-year yield is higher at 3.70%, a nice recovery from last week's lows.

The market has been up for 4 of the last 5 days, so my inclination is that the market will selloff after the FOMC announcement. Buy the rumor, sell the news is an old mantra. And if they decide to only cut 25 bps, the selloff could be fairly pronounced.

Will Ben do the right thing, Mookie???