They really do. The next day.
This is something completely new. Back in what we thought were the good old days under Federal Reserve Chairman Greenspan, the market would go into incredible waves of movement alternating between surges and plunges literally seconds after the embargo was lifted on the FOMC minutes.
You would thing that given all of the talk about how obtuse Greenspan's language was that investors would take their time to ingest and cogitate over the words and their meanings before committing huge sums of other people's money into the market vortex.
Bernanke on the other hand is widely lauded for his clarity and transparency. He even seems to allow dissenting opinion and some FOMC members, albeit occasionally non-voting, have been anxious to share their views, even when they are serial losers when it comes to prognostication.
Yet, when it comes to the release of the minutes, the market, at least in 2012, has been very slow to react to Bernanke's clear words.
Consider two measures, the Dow Jones Industrial Average and the price of Gold, as represented by its ETF, the SPDR Gold Trust (GLD).
For those that are frequent holders of SPDR S&P 500 Trust (SPY), the same relationships as above hold.
In 2012, once the slow boring melt-up in the beginning of the year was coming to its end, the FOMC minutes were far less of an influence on the markets than the day after, as everyone started second guessing whether a third iteration of Quantitative Easing was in the cards. Once the answer became more or less clear from the release of the minutes, the next quandary was whether a delay of QE 3 was good news or bad news.
In a world where bad news is construed as good news for the markets and good news only means disappointments await in the future, one can easily see how confusing clarity can be at times. Bernanke's clarity confuses everyone.
Although there's no doubt that are stock markets are no longer simply vehicles for US citizens and are part of an international financial base, perhaps the gold markets, as a truly international commodity, could be expected to be more rational in the timing of their reaction to the FOMC minutes, or perhaps even immune.
In the case of gold, it may be useful to also consider the prior day's trading activity as the day certainly starts on the other side of the world in precious metals. Here we see that there is frequently a reversal of direction or significant reduction in magnitude of movement on the day of the FOMC release in most months. The most recent release of the FOMC minutes on August 22, 2012 came in a week that the precious metals were surging each day.
But just as striking is another reversal on the day after the FOMC minutes that is frequently seen, as well as the magnitude of the changes.
Now, I happen to have a special place in my heart for silver as it has been a portion of my portfolio for over a year, but in the form of ProShares UltraShort Silver (ZSL), which has been particularly clobbered the past few days.
Here too the reactions to the FOMC minutes and then the reversals the day after are quite pronounced and evident with some regularity.
What does this mean?
For those prone to panic when looking at paper losses accruing in their accounts, don't fret too much. What the Federal Reserve may give or take will likely be ancient history in a day. There's neither reason to be elated or despondent. However, if you're on the right side of movement in either stocks or precious metals, there may be good reason to react before the market figures out what's really going on the next day.
Disclosure: I am long ZSL.