Hurry Up And Wait

Although the market is getting a bounce in early trading, the real move for today won't come until after the Fed meets and cuts interest rates later today. It is pretty much a done deal that the Fed will cut rates by 50 bps to 0.50%, but the commentary that comes with its statement will be closely scrutinized.

The dollar is lower again, likely reflecting the fact that interest rates are going lower and could stay there for a while. This is helping boost the price of gold lately, which often trades inversely with the dollar. Ditto for oil, which has had a hard time staying up lately, but is slightly higher again this morning (near $ 45.50).

In corporate news:

• Goldman Sachs (GS) reported a larger-than-expected loss, but the stock is rallying +8% on the news. This is another indication that the worst news is priced in, at least for the near-term. Brokers in general are higher today as well.
• Best Buy (BBY) reported better-than-expected results, albeit it on lowered expectations. Although it also reaffirmed its 2009 forecast, management said that the range is wide due to the fact that this is the most challenging consumer environment it has ever seen.
• Automakers could receive their bailout as early as tomorrow.

In economic news:

• Headline CPI fell -1.7% in November, a huge drop. This report shows inflation pressures at the consumer level are nonexistent, and that deflation is the bigger concern right now. This also gives the Fed increased leeway to cut rates and hold them at lower levels for longer.
• Housing starts for November declined by -18.9% to a rate of 625,000 (vs. 736,000 consensus). Although this is a weak report, the silver lining is that lower housing starts should help sop up the excess inventory as supply continues to run below the level of new home formations for the overall economy.

Asian markets were mixed overnight; the 10-year yield is lower again to an amazing 2.52%; and the VIX is slightly lower to 55.96, hovering just above recent support levels.