January is turning into a bit of a mess, isn’t it? Last night’s state of the union address was not market moving, but futures were buoyed overnight by action in Turkey, where they raised rates to defend their currency. It worked for about 10 seconds. By the time stocks were about to open here in the U. S., the futures had plummeted, and indeed, stocks opened down 150 Dow points. Traders then turned their attention to the Fed announcement which provided no real surprises. The FOMC announced an additional $10 billion reduction in asset purchases ($5 billion less in Treasuries and $5 billion less in mortgage backed securities), and seem to be on pace to eliminate QE by the fourth quarter of 2014. We’ll see, of course, as economic conditions could change their mind.

Stocks had a difficult session. By the close, the Dow Jones Industrial Average was down 189 points to finish the day at 15,738 and now down 5% for the year. The S&P was down 18 points to close at 1774. Gold was up $17 to trade at $1268 per ounce, while oil was down $.11 to trade at $97.30 per barrel WTI. Once again, natural gas was the star of the day in the energy complex, being up 10% for the day. Of course the cold weather is a factor and President Obama’s mention in the address last evening helped spur prices in natural gas.

Earnings on the other hand really have not been bad, but as I mentioned a couple of weeks ago we’ll see if shares were priced for perfection or were expectations appropriately lowered. So far, it seems that share prices were a bit lofty. Earnings have been decent, but stocks, for the most part, have reacted poorly to the reports.

Let’s see how the rest of the week/month plays out. So far, not so good.

Have a nice evening everyone.

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