Stocks Languish Ahead of Today's FOMC Meeting
The market is off to a sluggish start, after yesterday's early gains evaporated by the close and the S&P 500 finished below its 200-day moving average.
Volume will likely run light this morning, until the announcement comes out following today's FOMC meeting. I think few are expecting a big change from the Fed's language, but it will be interesting to see if they make any comments about growth moderating.
In corporate news, Jabil (JBL) and Adobe (ADBE) both reported solid earnings, but JBL stock is higher while ADBE is lower.
In economic news, new home sales for May just hit the wires, and the number was far weaker than anyone was expecting. Most analysts expected May sales to be lower after the new homebuyer tax credit expired, but the actual numbers showed a -32.7% plunge in new home sales. This is a very weak number, and the stock market has just ticked lower on the news.
Taking a look at the euro, it is down for a third straight day today. In commodity land, gold is higher to $1245, while oil prices are lower near $76.75.
The 10-year yield also ticked lower on the home sales report, with the yield now down to 3.10%, the lowest yields we have seen since October 09. The volatility index (VIX) is up +4.58% today, back above the 50-day average to a level of 28.28.
Trading comment: I kind of think the market indexes are in no-man's land right here. If we look at the recent trading range for the S&P 500, it bottomed at 1040 and topped near 1130. So the mid-point of that range would be SPX 1085, which is exactly where we are trading right now.
That said, the fact that we have fallen back below the 200-day average gives me pause, and I would likely lean toward making sales if we bounce back to the underside of that key moving average.
long GLD, VXX
Labels: new home sales