|
Daily Market Update – November 30, 2015 (Close) As quiet and uninteresting as the last week was, this week and the next one may be in a position to more than make up for the lack of any news, excitement or market moves. This week ends with the Employment Situation Report, but before then comes what may be a very contentious OPEC meeting and about 10 speeches coming from Federal Reserve Governors, including two from Janet Yellen and one from Stanley Fischer. All of those come before next week’s FOMC meeting, which is then followed by a Janet Yellen press conference. So this promises to be an event filled week. You wouldn’t have known that based on how the week got going. The OPEC meeting is thought to be one that’s going to put even more downward pressure on price and we’ve learned that during this cycle that has meant exactly the opposite of what it has meant in other times. It actually starts some hours before the Employment Situation Report is released, so there may be a double hit on Friday. This time around when energy prices go down, so has the stock market. Instead of seeing lower energy prices as a gift and trading ahead in discounting the future, as the market has always been purported to do, the market has looked at the here and now and seen low prices as a reflection of a faltering worldwide economy. On the other hand, the picture here in the United States is trying to decide whether the economy is sufficiently in recovery and on a path to continue the kind of growth that last week’s revised GDP indicated. The biggest news is likely to come from Friday’s Employment SItuation Report which would be expected to run somewhat in parallel to news of increased consumer spending that the GDP has been indicating. A good number is likely to solidify the odds of an interest rate increase being announced next week. A disappointing number is likely to add more confusion to the equation, but the handwriting still seems to be on the wall regarding that rate increase. The expectation has become that the FOMC will announce an interest rate increase, regardless of what the data may suggest, as the very idea of being “data driven” may have been a hoax. A good number would likely be met with investor optimism, while a poor number is likely to result in a sell-off, as no one likes the uncertainty that would be associated with such conflicting data. The pre-opening futures were indicating a mild move higher to begin the week, but after really spending the most of the day in a very apathetic manner, the day closed with an equally mild move lower, although it was deteriorating as the day came to its close. I’d have liked to see some pronounced weakness early in the session, having only 2 expiring positions this week at risk of not being assigned, in the event of a sell-off. With an unusually large number of ex-dividend positions this week, I wasn’t as concerned about not making any income generating trades this week, but you would never have known that, either. I did take some advantage of the upcoming ex-dividend dates and added to those positions, in addition to making my annual purchase of Bed Bath and Beyond. As with the last couple of weeks, while wanting weakness to start the week, I was willing to accept a flat open. Hopefully today’s splurging will look like a good idea in hindsight. In the event that the market shows strength through the rest of this week, I’m likely to now be a fairly passive observer, only looking for opportunities associated with the expiring positions and hoping to regenerate some cash for next week. |
