|
Daily Market Update – December 3, 2015 (7:30 AM) Yesterday’s large loss was not much more than an offset to the prior day’s large gain. Neither really had much reason for having occurred. As terrible as yesterday was, the news unfolding from California trivialized anything from the market. But here we are the following morning and with what is certainly grim and tragic news, with political or ideological connections, if any, still left to be identified, the market is ready to get right back to where it had been when the world was well. The morning’s futures trading, as Janet Yellen gets ready to make more comments, this time to Congress, is again very optimistic, although it really can’t be clear as to what the market may be responding toward. With every indication being that the FOMC will be increasing interest rates and with Janet Yellen indicating that she couldn’t wait for that first interest rate increase, it seems odd that the market, which was showing signs that it was finally ready to accept that fact, would sell off. If anything, the pattern would be to wait until the rumor or the anticipation became the reality. That definitely wasn’t the case yesterday, but may turn out to be the case today, just as it may have been the case on Tuesday. The lack of consistency is maddening, though. It’s not as if there’s any kind of rational explanation for the back and forth movements. It’s not as if any of it has been based in reality or in data. Yet, we have an FOMC that has long been assuring us that it will be data driven and here we are, seemingly at the precipice of a decision and with some heavy handed hinting, yet it’s not really clear that the data exists to warrant the decision. If it actually comes next week. It’s hard to know what the reaction might be if that decision doesn’t come next week. We’ve alternated between relief rallies of no interest rate increases to disappointments, sometimes all in a single day. The real key will likely be coming with tomorrow’s Employment Situation report. Good numbers should make it easier for the FOMC to justify a decision to act. Bad numbers would make it harder, but the action could still come, as it appears that even a dovish Janet Yellen wants to strike. Today, we watch, and maybe take advantage of any price moves higher, although it would have been much better if there was a similar move yesterday and we could have gotten the benefit of an additive effect. Otherwise, it’s just tighten your belts and wait for tomorrow and then really tighten up as next week unfolds. |
