Friends
Despite all the economic data released this morning, including a benign CPI number, a better than expected retail sales number and an as expected existing home sales number, stocks drifted aimlessly until the release of the Fed minutes at 1:00 PM our time. Somehow traders gleaned from the minutes that the “taper” could be back on sooner than later, and stocks headed south. Of course, stocks pulling back some is no shock to us, and quite frankly might be a pause that could refresh, but to interpret old Fed minutes as anything useful is somewhat comical. Anyway, the damage was minimal considering the gains we have seen lately, so we’ll see if this is anything more than just a one day event.
By the close, the Dow Jones Industrial Average was down 66 points to finish the day at 15,900. The S&P 500 was down 6 points to close at 1781. Gold was down $29 to trade at $1244 per ounce, while oil was down just $.01 to trade at $93.33 per barrel WTI. The Dow is still within striking distance of 16,000 and the S&P is still just a stone’s throw away from 1800.
We’ll see if any real damage was done today, but remember the Fed will be data dependent, and Ms. Yellen won’t really be at the helm until the first quarter of next year. Yes, we would like the taper to begin sooner than later. Let’s get on with it. But it is very unlikely that any significant Fed action will occur before the end of the year. Remember, we have the politicians to deal with again soon, and I doubt the Fed wants to front run that circus.
