Friends
To taper or not to taper, that is the question. Market participants waited with bated breath for the Fed minutes to be released this afternoon, but when it was all said and done, did we really learn anything new? Well, we found out that the members of the FOMC are concerned about the mixed signals that the economy is sending, and are still not sure when the tapering process should begin. So basically, we still don’t know when tapering will begin. Does it really matter? We know that it will begin sometime. Anyway, the market’s reaction was somewhat schizophrenic. What was already a negative bias to the trading session got a little uglier once the minutes were released. The Dow turned a 50 point decline into a triple digit decline, then rallied back to positive territory, only to turn negative once again in the last hour of trading.
By the close, the Dow Jones Industrial Average was down 105 points to finish the day at 14,897. The S&P 500 was down 9 to close at 1642. Gold was down $4 to trade at $1367 per ounce, while oil was down $1.15 to trade at $103.96 per barrel WTI. The S&P settled right at the most recent support level. Tomorrow will be an interesting trading day.
It is becoming apparent that the Fed is just as confused as the rest of us, and will, indeed, need more data to determine whether the economy can handle the taper. Perhaps another good weekly jobless claims number can be helpful tomorrow. Obviously, August has been difficult for both stocks and bonds. Let’s see how things proceed now that we have the Fed minutes behind us.
Have a nice evening everyone.
