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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • NOTHING BUT FED - By WSS Research Desk 0 comments
    Sep 20, 2013 2:13 PM

    By Carlos Guillen

    Equity markets are slowly sinking as investors continue to reinterpret the FOMC's decision made two days ago, and now more comment from Fed officials are filtering through news media and is now raising concern that tapering may begins as soon as next month.

    Earlier this morning, it was reported that St. Louis Federal Reserve Bank President James Bullard, who was among the Fed officials who voted to keep policy unchanged, said the FOMC may reduce bond purchases in October after a "borderline" decision not to do so at the central bank's latest meeting. Of course, this has server to spook investors once again and is putting pressure on the Dow Jones Industrial Average, which is now down over 110 points. While on Wednesday the Dow spiked close to 150 points on the "no tapering news," combining the session from yesterday and today, the Dow has given up almost all of the gains as investors digest the FOMC's action and as investors now see the possibility of tapering actions happening as soon as October 29 when the FOMC will meet again to review its monetary policy. We can certainly expect to continue seeing the effects of this throughout today's session.

    We should also note that today is known as a "quadruple witching" session in Wall Street as it is a day when index futures, index options, individual stock options, and individual stock futures all expire on the same day. The effects of this is higher volumes earlier in the trading session, whether up or down, but the direction is typically not affected.

    On overseas items, India's central bank surprised everyone, as it increased its repurchase rate by 25 basis points to 7.50 percent. This news sent the Sensex sharply lower, ending the session down close to 2 percent.

    In corporate items, Apple began selling its new iPhone in Asia and Europe. As it stands initial demand was seen favoring the higher-priced version of the two iPhone models. And, last but not least AK Steel is down over 7 percent after the steelmaker projected a third-quarter loss that was wider than the Street forecast as the company experienced a decline in shipments and prices. Next week should be very eventful as we will be getting a glimpse into a slew of economic data that should shake markets, including consumer confidence, Durable Orders, New Home Sales, GDP, and Michigan Sentiment.


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