Will The Fed Change Their Language At All?

The markets are getting a nice bounce in early trading, after Asia finished mixed and Europe opened to the upside. A report on the December Eurozone Services Purchasing Managers Index hit 53.7, its highest level since November 2007. Not bad.

The FOMC meets today, and while it is a near certainty that they will hold rates steady a 0%-0.25%, there is some talk about if they will change any of the wording in their statement. Any change in the wording would lend itself to the Fed getting closer to withdrawing some of the liquidity it has pumped into the system. But from my perch, I think the language will remain essentially unchanged for now.

In economic news, the November CPI came in at 0.4%, and was flat excluding food and energy. Housing starts for November rose to 574,000 from 527,000 last month. And building permits hit an annualized rate of 584,000 from 551,000 last month.

The dollar is lower this morning, which is helping boost commodities. Oil is higher near $72 and gold is also up to $1138. The 10-year yield is lower to 3.57%, and the VIX is down another -4.3% to 20.56.

Trading comment: The stair-step market continues, and the Nasdaq is making new highs right now while the S&P 500 is very close. The rally could fade after the FOMC announcement today, but post-Fed trading is always a guess. AAPL is at a critical juncture here technically, as it bounces back to the underside of its 50-day average. I am staying long. GOOG might run into some resistance at $600, which is another new high. But the momentum seems to be returning to GOOG's business, and I want to stay long that stock as well.

long AAPL, GOOG