Wall Street Greek: Wednesday’s Market Summary

Federal Reserve Bank Building Headquarters HQ

Say what you mean and mean what you say - is what seasoned investors would say to the Federal Reserve today. The FOMC meeting minutes release offered a different message than otherwise issued by the Fed through its FOMC Policy Statement and the speeches and testimonies by Fed Chairman Bernanke and VP Janet Yellen. Stocks suffered for it and the dollar gained, sending many commodities lower. Those of you working the late shift can look for Asia to turn sharply south this evening as well.

Wednesday’s Market Summary

Market ETF	November 20	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	-0.3%	+25.3%
SPDR Dow Jones (NYSE: DIA)	-0.3%	+21.6%
PowerShares (Nasdaq: QQQ)	-0.2%	+27.0%

Stocks turned downward once the FOMC meeting minutes were released. Suddenly the message from the Fed changed and tapering become a near-term possibility once again. It was a different message than recently conveyed by policy statement and Janet Yellen’s testimony, so stocks suffered.

Economic Events

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior Period	Expected	Actual
WEDNESDAY
Consumer Price Index	+0.2%	0.0%	-0.1%
-Core CPI	+0.1%	+0.2%	+0.1%
FOMC Minutes Release
Retail Sales	0.0% R	0.0%	+0.4%
-Less Auto & Gasoline	+0.3%	+0.3%	+0.3%
Business Inventories	+0.4%	+0.3%	+0.6%
Existing Home Sales	5.29 M	5.13 M	5.12 M
Mortgage Activity	-1.8%		-2.3%
EIA Petroleum Status
-Crude Oil Inventory	+2.6 M		+0.4 M
-Gasoline Inventory	-0.8 M		-0.3 M
Dudley Speaks
Bullard Speaks

-R symbolizes “revised”

Economic data started the day as a positive catalyst for stocks, but turned sour at the 2:00 PM ET release of the FOMC Meeting Minutes. We warned in our weekly preview that the market would hang on the Fed’s words, and what it heard was not reassuring. The FOMC members discussed the potential importance of beginning tapering before economic data showed signs of further economic improvement. That was not something Ben Bernanke has suggested, as he has constantly reassured market participants that the Fed would be responsible and data dependent. FOMC members also explored tapering in more detailed fashion, discussing how they might best employ the financial maneuver. The fact that the Fed is discussing the issue in detail is a sign that it’s quite close to beginning the process, and that is also not something market participants were ready to hear today.

Stocks got a lift early Wednesday when Retail Sales came in stronger than expected at +0.4%. However, when excluding autos and gasoline, sales were equal to expectations at +0.3%. That was about equal to the rise of the prior month as well. Growth in sales is good news, especially when economic health and especially consumer spending is in question. Even so, Wal-Mart (NYSE: WMT), the nation’s retailer sank even before the 2 PM FOMC release, though the SPDR S&P Retail (NYSE: XRT) held ground until then. There was a negative bit of publicity about the holiday shopping season that hurt Wal-Mart shares more so that retailers generally.

The rest of the economic slate was solid enough. Consumer level prices showed no signs of inflation, with headline prices actually falling. The Core CPI, which excludes volatile food and energy prices, increased just 0.1%, which was less than expected and equal to the prior month’s mild rise. Business level inventories rose by a sharp 0.6%, but business level sales only increased by 0.2%. Never fear though, as we are in the seasonal period within which the stocking of inventory makes perfect sense. Existing Home Sales slipped from the prior month rate, but met expectations. The stall in housing along with the FOMC release sent housing stocks lower today. The SPDR S&P Homebuilders (NYSE: XHB) fell fractionally.

Overseas Markets

EUROPE	CLOSE	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-0.1%	NIKKEI 225	-0.3%
German DAX	+0.1%	Hang Seng	+0.2%
CAC 40	-0.1%	S&P/ASX 200	-0.8%
FTSE 100	-0.2%	Korean KOSPI	-0.7%
Bloomberg GCC 200 Mideast	-0.2%	BSE India SENSEX	-1.2%

The European Central Bank (ECB) was said to be discussing a negative deposit rate to ward off deflation. The mere fact that it sees need to ward off deflation is troubling, and so the practical Europeans reacted to that news rather than to the rate benefit for the economy and financial securities (like we would here). Geopolitical issues between Indonesia and Australia likely played a role in suppressing the performance of the S&P/ASX 200 today, though India and Korea both sold off in concert. Rising tensions about the Middle East are certainly playing a role in global securities markets, with bombs blowing up in Lebanon, Iraq and Afghanistan over the last two days. Also, it seems Israel is preparing to go it alone or alongside the Saudis against Iran, with the west looking for a way out of confrontation. If conflict is inevitable, we would be drawn in, and so securities markets face significant risk. Iran is a significant nation with important regional and global influence, and so something more severe than other Middle Eastern issues may result from such disturbance of it.

Commodity Markets (CLOSE)

WTI Crude	-0.0%
Brent Crude	+0.9%
NYMEX Natural Gas	+3.2%
RBOB Gasoline	+0.6%
Gold Spot	-2.5%
Silver Spot	-2.6%
COMEX Copper	-0.4%
CBOT Corn	-0.2%
CBOT Wheat	-0.6%
CBOT Soybeans	-0.2%
ICE Cocoa	+0.5%
ICE Sugar	-0.3%
ICE Orange Juice Conc.	+1.1%
CME Lumber	+0.2%
CME Live Cattle	+0.2%

The FOMC statements lifted the dollar and sent gold and silver lower. With cold overcoming the Northeast, natural gas gained ground.

Corporate Events

It was an especially light reporting day.

HIGHLIGHTED EPS REPORTS
Company	Ticker
WEDNESDAY
J.M. Smucker	NYSE: SJM
ADT Corp.	NYSE: ADT
Green Mountain Coffee	Nasdaq: GMCR

MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
Unilife Corporation (Nasdaq: UNIS)	+43%
Zhone Technologies (Nasdaq: ZHNE)	+42%
Remark Media (Nasdaq: MARK)	+34%
Wireless Telecom (NYSE: WTT)	+21%
SGOCO Group (Nasdaq: SGOC)	+20%
China Recycling Energy (Nasdaq: CREG)	+23%
Vimicro Int’l (Nasdaq: VIMC)	+23%
Pointer Telocation (Nasdaq: PNTR)	+20%
ERBA Diagnostics (NYSE: ERB)	+19%
Cordia Bancorp (NYSE: BVA)	+18%
BIGGEST LOSERS	% Drop
Augusta Resource (NYSE: AZC)	-68%
Aeterna Zentaris (Nasdaq: AEZS)	-35%
Ashford Hospitality Trust (NYSE: AHT)	-34%
Voxeljet AG (Nasdaq: VJET)	-31%
China Housing & Land Development (Nasdaq: CHLN)	-32%
Northwest Biotherapeutics (Nasdaq: NWBO)	-26%
Mastech (NYSE: MHH)	-22%
Mediabistro (Nasdaq: MBIS)	-19%
InterCloud Systems (Nasdaq: ICLDW)	-19%
China Ming Yang Wind Power (NYSE: MY)	-18%

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.