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The hot day for the East Coast will be a sizzler for the market as well. That's because the latest relief rally has hinged itself onto the Federal Reserve Announcement due at 12:30 PM ET today. The Fed has broken up its format into three chunks, with a 12:30 PM policy announcement followed by the 2:00 PM release of the FOMC Forecasts, followed by the Chairman's press conference at 2:15 PM ET.

The extravagance of the matter has only added to the hopes of the market, but alas, I fear the market may be disappointed today; first, because I'm not sure the Fed sees a need for new action (though the market is desperate for ingenuity), and secondly because I do not believe there's much the Fed can do at this point, except further spread risk for a later grand finale for the dollar. This is the key market driver today without a doubt. Expectations will continue to drive market action up to the announcement, and the series of Fed actions through the steamy afternoon will control the close. At the open, the SPDR S&P 500 (SPY) was down fractionally, perhaps already feeling the heat on the Fed will drive the market to faint.

The stocks likely to best reflect the effect of the Fed will be the financials, including the nation's largest: Bank of America (BAC), J.P. Morgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS), et al. The last five days trading in the Financial Select Sector SPDR (XLF) shows a certain positive expectation (attribution to Yahoo Finance for the chart). Unfortunately, I expect those hopes will be deflated in short time.

Chart forFinancial Select Sector SPDR

The rest of the economic slate is light for Wednesday, including only the regular mortgage applications report and the petroleum inventory data.

The Mortgage Bankers Association reported on Weekly Applications earlier this morning. For the week ending June 15, 2012, the MBA's Market Composite Index showed a mortgage activity decline of 0.8% week-to-week on a seasonally adjusted basis. Mortgage applications tied to the purchases of homes fell by 9%, while the MBA's Refinance Index gained by 1% on mortgage rates still near all-time lows. The MBA said the change in "purchase activity" was likely due to recalibration related to the Memorial Day holiday, and is therefore not as alarming as it may seem on the surface. Thus, the shares of homebuilders like PulteGroup (PHM) and Toll Brothers (TOL) and other market participants including Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) are likely to be unaffected by the news.

The EIA reports on Petroleum Status at 10:30 AM ET each Wednesday. In its last report covering the period ending June 8, U.S. commercial crude oil inventories decreased by 0.2 million barrels, but remained above the upper limit of the average range for this time of year. Total motor gasoline inventories fell by 1.7 million barrels with the summer driving season upon us now. Gasoline stores were below the lower limit of the average range for this time of year, though gas prices continue to ease with rising economic concerns. The shares of Exxon Mobil (XOM) and Chevron (CVX) were each trading fractionally higher to start the day Wednesday.

In conclusion, the day's trade should be driven by the Federal Reserve actions starting at 12:30 PM. We're looking for market disappointment on little to no new action and/or a realization that there may be little new constructive action the Fed can take at this point. Keep following The Greek for more content like this and at the blog as well.

Source: Market Moving News - A Hot One