Friends
Another day of waiting for politicians to say something intelligent (I’m sorry but writing that just made me laugh). We had our daily dousing of the “they’re getting it done behind the scenes” flames by Speaker Boehner and Senate Majority Leader Harry Reid. If they indeed are coming close to an agreement behind closed doors, then these guys are truly great actors. From what I am hearing it sure doesn’t sound like they are even close. Ah, but late in the session word got out that the President and the Speaker were going to meet again. Everyone hold your breath.
As for the markets, after being down just shy of 100 Dow points with an hour left in trading, stocks rallied a bit on the Obama/Boehner meeting news to trim the losses by the close. For the day, the Dow Jones Industrial Average was down 74 points to finish trading at 13,170. The S&P 500 was down almost 9 points to close at 1419. Gold was down $19 to trade at $1698 per ounce, while oil was down $.57 to trade at $86.20 per barrel WTI. The bulls will be delighted that 1419 held on the S&P (just barely), but in a market moved minute by minute on the musings of politicians and central bankers, technical levels seem less important at the moment.
Back to our diminishing returns discussion with regards to Fed action that we had yesterday, it sure looks like we rallied into the Fed meeting only to sell off on the news of more quantitative easing. Perhaps the bullish case of risk assets being fueled by the Fed’s actions is still intact, but it sure seems like the Fed is becoming less relevant with each additional measure they employ. I know we have always said, don’t fight the Fed, but the Fed is seemingly becoming a weakened opponent.
Have a nice evening everyone.
