Börsipäev 14. detsember - Fed fookuses
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Rev Shark:
Come On, Admit It: This Market Looks Good
12/14/04 8:12 AM ET"It is not work that kills men; it is worry. Work is healthy; you can hardly put more upon a man than he can bear. Worry is the rust upon the blade. It is not the revolution which destroys the machinery but the friction. Fear secretes acids; but love and trust are sweet juices."
-- Henry Ward Beecher
How can we not be at least a little distrustful of a market that has been as strong for as long as this one has? Surely we are due for some major disappointment any time now. These bulls who have been blindly buying as if they didn't have a care in the world are certain to be hit hard by the always cranky Mr. Market.
Given the mediocre economic news, the extended nature of the indices and the long list of other worries and concerns we'd be fools not to worry about this market at least a little. There are plenty of bears out there who are more than happy to point out why this market is going to get smacked hard any time now.
Go ahead and worry a bit. We always have to keep in mind what can go wrong. When we are overconfident and certain that nothing bad can happen to us the gods will certainly find a way to show us the errors of our ways. However, being aware of the negatives and contemplating what can wrong doesn't mean we should be frozen into inaction. Despite all of the legitimate worries the bears keep muttering about, there is some excellent upside action. There are strong pockets of momentum, the S&P 500 has produced a very nice technical breakout and the buyers are showing few signs of quitting.
A little worry is good because it keeps us on our toes but we can't let it weigh on us so much that we don't take action. There will be a time to embrace our concerns about the market but it is premature to do so now. We need to respect what is in front of us, which is some pretty darn healthy action. Worry is not going to make you much money in this market. This is a time for action and there is a strong likelihood it will be that way through the end of the year.
The early action this morning is slightly negative as market participants experience a few jitters in front of the FOMC interest rate decision, due out at 2:15 p.m. EST. A quarter point hike is very widely anticipated and folks will be parsing the accompanying policy statement for clues on the future course of interest rate hikes.
It is unlikely the FOMC will do anything surprising but this is an event that many market participants will play off of, and it can trigger a sharp move. The market is in a position where it will be susceptible to bouts of profit taking but there some dip buyers lurking about under the market.
Overseas markets were slightly higher overnight, crude oil inched up a tad and the dollar was mixed. Trading may be a bit slow in front of the FOMC decision but there is a lot of momentum money sloshing around looking for action and if traders don't find it, they create it.
Gary B. Smith:
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Gapping Up
VRTS +13% (NY Times reports that Symantec said to be in talks for Veritas), ERTS +6.5% (analysts exceedingly positive following NFL deal), SLAB +6.1% (chosen by Amoi Electronics; Smith Barney inits with a Buy and $46 tgt, TWP positive), LPSN +17% (announces launch on Overstock.com), CKR +10% (reports OctQ), CBMX +9% (reaches milestone with NDC), EASI +7.6% (beats by $0.05; guides above consensus), ARDI +7% (announces new mobile resource mgt solution for RIMM), TFSM +7% (co and Lycos strengthen agreement), ANTP +5.7%, BEAS +4.5%, FON +3.9% (WSJ says VZ may make bid for FON), SHOP +3.8% (co's UK subsidiary entered into a Google Services Agreement whereby Shopping.com UK will participate in Google's sponsored links program in the U.K), PPDI +3.7% (guides for Y05), JOBS +2.5% (continues recent momentum).... Under $3: ZTLDC +29% (ads to 65% move from yesterday), HEC +21%, NYER +11%, AAC +6.4%.
Gapping Down
ADTN -14% (lowers guidance for Q4 below consensus; two downgrades), SYMC -7.3% (NY Times reports that Symantec said to be in talks for Veritas), VISG -5.3% (registers stock for selling stockholders), MCRI -5.2%, TKLC -4.9% (CFO resigns, OpCo downgrade), TTWO -3.3% (ERTS deal with NFL), NXTL -3.3% (VZ said to be interested in FON; NXTP -3.3%), VOD -3.2% (Goldman downgrade). -
Börsipäev peaks kujunema tavapäraseks Fed-i istungi päevaks, kui päeva alguses toimub vähe liikumisi ning suurem aktsioon toimub peale intressimäära otuse teatavakstegemist.
USA kaubavehatusdefitsiit oli taas oodatust suurem ning küündis 55,5 miljardi dollarini (oktoobris), eelmisega kuuga suurenes see 8,9% ning saavutas taas rekordtaseme.
Tarkvararindelt on kuulda taas ülevõtmisjutte, nimelt avaldas New York Times, et Veritase ülevõtmiseks on kõnelusi peetud juba kuu aega, aktsia on eelturul 10% plussis.
Wall Street Journal tõstis esile aga jutte Sprindi (FON ) võimalikust ülevõtmisest Vodafone poolt.
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Kuidas on turud käitunud varasemate selle aasta intressitõusude puhul .... vaata siia
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Oodatult tõstis Fed intressimäära 2.25% tasemele ehk 0.25% võrra. Turud tõusus.
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Chart of the Day
Today, the Federal Reserve raised the fed funds rate from 2% to 2.25%. Today's chart provides some perspective to the current interest rate environment and how it relates to the stock market. The bottom chart illustrates that while the fed funds rate has been rising as of late, it still remains well within a long-term downtrend. The top chart illustrates how the market performed following significant tops and troughs in the fed funds rate. For example, the stock market's performance has been less than stellar following major troughs in the fed funds rate (see red arrows). There is logic to this relationship since rising rates increase both the cost of debt and the relative attractiveness of interest bearing investments
