Hurry Up And Wait
All eyes are on the FOMC today where it is expected that Chairman Bernanke will announce that the Fed will reduce the size of its asset purchases by $10-15 billion. Interest rates have been on the rise since chatter started making the rounds about said 'taper', and today the 10-year yield is up a little more to 2.88%. But we have yet to top the 3.0% level.
It's hard to tell if the taper has been priced in and bond yields have put in short-term tops or if bonds will continue to sell off post-taper and yields continue to creep higher.
Volume will likely run extremely light until the FOMC announcement at 2pm EST and then we should see a burst of trading and volatility into the close. So get ready.
In economic news, housing starts hit an annualized rate of 891,000 during August. This is slightly above last month's revised figures, which were revised down from 896k to 883k. Building permits also came in below expectations.
Asian markets were mixed overnight. China's home prices rose 8.3% last month. European markets are modestly higher. The minutes from the latest Bank of England policy meeting showed unanimous vote to leave their purchasing program unchanged.
Oil prices are higher today near $106.55 while gold prices are weaker falling back to the $1300 level.
As for the volatility index, it is slightly lower still hovering in that 14.45 range.
Trading comment: No change to our recent outlook. We continue to use weakness to pick spots to add to equity exposure. Despite all the worries about the taper, the debt ceiling, Syria, etc. the stock market has again found its footing and is knocking on the door of new highs. It has been a frustrating year for those looking for the big 10%-plus corrections. But price is the final arbiter, and in this business its okay to be wrong but its not okay to stay wrong.