Ahead of the open, (26-01)
Thursday, January 26, 2012 at 08:02AM Although, U.S eco’ has solidified since the beginning of the year, the FED doesn’t seem to believe it too much. That was the message this afternoon as FOMC/Bernanke ‘surprised’ the market with dovish tone instead of an expected tiliting ‘hawkish’ one.
Besides pushing out the period of Fed fund rates to be held at near zero to late ’14 instead of mid ’13, Bernanke later hinted it would not take much of disappointment in growth to kick some more QE into gear if these ‘unsatisfactory conditions’ persist. The latter gave momentum to equities/commods’/Gold as the usual effects of QE took hold with USD/TSY downside.
Unfortunately, due to a prolonged ‘ZIRP” all is not so cut and dry as the trade of ’12 reverted back to ’11 in the underlying tape. If sidelined ‘longs only were waiting for a pullback, today’s events complicated things somewhat as a ‘ safety’ rotation in equities took place with many Financials sub-sectors selling off and ‘safe’ sectors such as Utilites getting a bid.
Looking ahead, SP 1315 becomes support and a close below will signal a much needed correction is already underway. Until, the odds of some performance anxiety into month end increased.
- URI PMTC, a few small caps coming in with solid earnings.
