WEDNESDAY’S MARKET: Focused on the Fed

We are fully focused on the Fed Wednesday, with the Federal Open Market Committee (FOMC) meeting minutes set for release this afternoon at 2:00 PM ET. The day’s economic wire offered enough interesting info for review otherwise, with two housing data points released this morning along with the regular petroleum inventory data. We also received news from Asia today, but capital is running out of emerging markets with India especially crashing today. The corporate wire offered good news from homebuilder Toll Brothers and bad news from retailer Target. You’ll find more details below, and for more regular analysis of markets and securities visit our columns here and elsewhere.

Markets Coverage

Market ETF	August 21, 2013	Year-to-Date
SPDR S&P 500 (SPY)	-0.4%	+15.8%
SPDR Dow Jones (DIA)	-0.4%	+14.2%
PowerShares (QQQ)	-0.3%	+15.9%

After a blip higher yesterday, U.S. stocks are running scared again today ahead of the Fed meeting minutes release. We are still bearish on our broader market call today, given our expectation that investors with pretty paper profits are leaning toward taking those here given the situation. The Fed remains likely to follow through on its promise to begin tapering. While we may get some positive lip service from Jackson Hole later this week, this day’s minutes release should offer reason to sell.

Economic Events

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior Period	Expected	Actual
WEDNESDAY
Fed FOMC Meeting Minutes
Existing Home Sales	5.06 M (R)	5.15 M	5.39 M
Mortgage Activity	-4.7%		-4.6%
EIA Petroleum Status
-Crude Oil Inventory	-2.8 M		-1.4 M
-Gasoline Inventory	-1.2 M		-4.0 M
ASEAN Economic Ministers Meeting
Asian Development Bank Discusses Asia

The Federal Reserve FOMC meeting minutes release is likely to reinforce market fears of Fed tapering today. I say this because the Fed has well-telegraphed its plans to begin pulling back its asset purchases, and at every communication has reinforced that message. Market pundits are speculating that the Fed might not follow through on its plans due to data, but this is merely an expression of hope born of greed. The media has perpetuated this message simply to fill time and make for more debate, which helps make news that simply is not there.

The housing market offered two different messages today. The regular mortgage activity report showed the second consecutive week of deep decline in overall mortgage activity. Though, not really, given that applications tied to the purchases of homes increased by 1.0%. The annual pace of existing home sales improved at this latest check, and consoled housing investors who are concerned about the impact of higher interest rates. The takeaway here is that the season for home buying is coming to an end now, and when data is produced for August, a very different message might come through.

Overseas Markets

EUROPE	11:50 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-0.5%	NIKKEI 225	+0.2%
German DAX	-0.2%	Hang Seng	-0.7%
CAC 40	-0.3%	S&P/ASX 200	+0.4%
FTSE 100	-1.0%	Korean KOSPI	-1.1%
Bloomberg GCC 200 Mideast	+0.2%	BSE India SENSEX	-1.9%

The emerging market sell-off is gaining steam, with India especially seeing sharp decline today. Stay away from this group; do not attempt to catch the falling knife here because it’s moving too fast still. It will fall through your bid.

Commodity Markets (11:50 AM ET)

WTI Crude	-0.5%
Brent Crude	-0.3%
NYMEX Natural Gas	+0.9%
RBOB Gasoline	+0.8%
Gold Spot	-0.1%
Silver Spot	-0.1%
COMEX Copper	-1.3%
CBOT Corn	+1.3%
CBOT Wheat	+0.5%
CBOT Soybeans	+1.2%
ICE Cocoa	-2.8%
ICE Sugar	-0.6%
ICE Orange Juice Conc.	+1.1%
CME Lumber	-0.8%
CME Live Cattle	-0.2%

Surprisingly, crude and gasoline continue to decline in price, even as the Egyptian death total is at 1000 and counting. The market is still focused on the fact that Egypt does not produce any oil and ignoring the fact that this marks the second nation falling into civil war in the Middle East. It’s an issue that seems likely to spread to other areas as we approach September and the region shifts from holiday season to normal misery.

Corporate Events

Toll Brothers (NYSE: TOL) said it would be raising prices, a sign that business is good and getting better. The news helped the high-end homebuilder today. TOL shares are up approximately 1.0% at this hour. Target (NYSE: TGT) shares are down 2.9% after the retailer reported poor results.

REPORTING EARNINGS
Company	Ticker
WEDNESDAY
American Eagle Outfitters	NYSE: AEO
Charm Communications	Nasdaq: CHRM
Eaton Vance	NYSE: EV
Globe Specialty Metals	NYSE: GSM
Hewlett-Packard	NYSE: HPQ
J.M. Smucker	NYSE: SJM
L Brands	NYSE: LTD
Lowe’s	NYSE: LOW
PetSmart	Nasdaq: PETM
Target	NYSE: TGT
Madison Square Garden	NYSE: MSG
PetSmart	Nasdaq: PETM
Toll Brothers	NYSE: TOL
Citi Trends	Nasdaq: CTRN
Hain Celestial Group	Nasdaq: HAIN
Prospect Capital	Nasdaq: PSEC
Semtech	Nasdaq: SMTC
Synopsis	Nasdaq: SNPS
AFC Enterprises	Nasdaq: AFCE
ValueVision Media	Nasdaq: VVTV

MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
SGOCO Group (Nasdaq: SGOC)	+31%
Incyte Corp. (Nasdaq: INCY)	+28%
Inovio Pharmaceuticals (NYSE: INO)	+20%
Astea International (Nasdaq: ATEA)	+19%
Diamond Foods (Nasdaq: DMND)	+18%
DGSE Companies (Nasdaq: DGSE)	+16%
Saratoga Resources (Nasdaq: SARA)	+12%
Sunshine Heart (NYSE: SSH)	+14%
Trina Solar (NYSE: TSL)	+13%
Galectin Therapeutics (Nasdaq: GALTW)	+12%
BIGGEST LOSERS	% Drop
iPath Long Enhanced MSCI Emerging (Nasdaq: EMLB)	-21%
Key Tronic (Nasdaq: KTCC)	-15%
Staples (Nasdaq: SPLS)	-14%
Direxion Daily India Bull (Nasdaq: INDL)	-14%
XG Technology (Nasdaq: XTGIW)	-11%
Income Opportunity Realty Investors (NYSE: IOT)	-11%
China Digital TV (NYSE: STV)	-11%
American Eagle Outfitters (NYSE: AEO)	-10%
eFuture Information Technology (Nasdaq: EFUT)	-9%
Capital Acquisition Corp. (Nasdaq: CLACW)	-9%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.