Wednesday, March 21, 2007
Fed Day!!
The markets moved up again yesterday. The SPX added another 8.88 points to fnish on 1410.94. We are still in green and looking ok.
Worries about the housing sector eased some yesterday when February housing starts came in much stronger than expected. Housing starts rose 9 percent to an annualized rate of 1.525 million units, which easily surpassed estimates for a reading of 1.45 million. However, building permits, which is a precursor to future starts, fell 2.5 percent with single family permits down 3.1 percent. Of course, housing problems could also worsen if the subprime problems create fewer available loans to buy homes with.
The Fed meets today to discuss interest rates. A hold in rates is an alomost certainty but traders are as always looking to see what the Fed indicates the future of rates will be. Looking at the markets from the last few days it seems traders are expecting some dovish talk on rates, with the bulls pushing stocks higher the past two sessions. Prior Fed statements have been erring on the side of inflation, which has kept the odds of a Fed rate cut down. However, recent economic data has not been as strong and there even has been talk of a recession. This means the Fed is likely to raise its concern about economic growth to be balanced with worries about inflation.
Lets see shall we.
Until next time.
Worries about the housing sector eased some yesterday when February housing starts came in much stronger than expected. Housing starts rose 9 percent to an annualized rate of 1.525 million units, which easily surpassed estimates for a reading of 1.45 million. However, building permits, which is a precursor to future starts, fell 2.5 percent with single family permits down 3.1 percent. Of course, housing problems could also worsen if the subprime problems create fewer available loans to buy homes with.
The Fed meets today to discuss interest rates. A hold in rates is an alomost certainty but traders are as always looking to see what the Fed indicates the future of rates will be. Looking at the markets from the last few days it seems traders are expecting some dovish talk on rates, with the bulls pushing stocks higher the past two sessions. Prior Fed statements have been erring on the side of inflation, which has kept the odds of a Fed rate cut down. However, recent economic data has not been as strong and there even has been talk of a recession. This means the Fed is likely to raise its concern about economic growth to be balanced with worries about inflation.
Lets see shall we.
Until next time.
# posted by Paul @ 5:18 AM 
