By Carlos Guillen
Equity markets are continuing on their third day of declines as investors continue to focus on any bits of hints coming from Fed officials in reference to scaling back on Fed asset purchases.
The Fed comments started on Monday with Dallas Fed President Richard Fisher, one of the most vocal critics of quantitative easing, saying the central bank is closer to slowing its $85 billion per month bond buying program and warning investors not to rely on that stimulus. Then on Tuesday comments from Federal Reserve Bank of Atlanta President Dennis Lockhart exacerbated Fed tapering talk as he told Market News International that the Fed could start curtailing its bond-buying program at any of the three remaining Federal Open Market Committee meetings this year. Shortly after, Chicago Fed President Charles Evans, who is particularly dovish, said the bond-buying program is likely to be scaled back this year.
It should be noted, however, that Fed officials have emphasized that tapering does not mean tightening, and the Fed's short-term interest rates are likely to remain low until the unemployment rate drops substantially.
Today we are supposed to get another slew of Fed speakers, who may have added more details on the matter, but they have been rescheduled. They included Philadelphia Fed President Charles Plosser (not a voting FOMC member, typically hawkish) and Cleveland Fed President Sandra Pianalto (not a voting FOMC member, typically dovish), both of which will be speaking tomorrow.
At the moment, equity markets are stable but still in losing territory, with the Dow Jones Industrial Average down over fifty points. With little in terms of economic drivers today and with continuing chatter about Fed tapering it is unlikely that stocks will recover the ground lost today.
By David Urani
It's starting to cool off this summer, a welcome change from some of the sweltering heat we had earlier here in NY. That cool wave has been sweeping the Midwest and the Eastern US and it's had a similar cooling effect on natural gas prices as Americans lay off the A/C. Weather forecasts show that trend continuing. It's been a drastic shift over the past few months for natgas which was more than $4.40 at the end of April, and is now at $3.27 for September futures, a five month low. That's a drop of more than 26%.