Wall Street Greek: TUESDAY'S RUNDOWN: On Fed Clock Countdown

We’re on Fed clock countdown until tomorrow afternoon, when the Federal Reserve’s FOMC will issue their latest monetary policy. Investors are hinged here on the Fed taper and whether it happens or not; in other words, whether the Fed begins to slow down stimulus efforts for an economy that seems to not need it so bad based on data. What’s working against that call for tomorrow is the fact that holiday shopping matters a lot for this economy, and so the Fed may not want to risk disturbing that with a sudden stock market drop. Follow us at the blog, and also, please find a link to our latest write-up on Amazon.com (Nasdaq: AMZN), published exclusively elsewhere.

Tuesday’s Market Rundown

Market ETF	December 17	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	-0.3%	+25.5%
SPDR Dow Jones (NYSE: DIA)	-0.1%	+21.6%
PowerShares (Nasdaq: QQQ)	-0.0%	+31.0%

Stocks are losing ground again today, given the price increase found in the Core CPI this morning. It’s all the more reason for the Fed to begin tapering.

Economic Events

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected	Actual
TUESDAY
FOMC Meeting Starts
Consumer Price Index	-0.1%	0.0%	0.0%
-Core CPI	+0.1%	+0.1%	+0.2%
Current Account	$-98.9 B	$-96.6 B	$-94.8 B
Housing Market Index	54 R	55	58
ICSC Weekly Store Sales	-1.6%		+4.8%
-Year-to-Year Pace	+1.5%		+2.0%
Redbook Store Sales	+2.6%		+2.9%

-R symbolizes “revised”

The Core CPI figure reported today showed prices up 0.2% when excluding food and energy; it was exactly what market enthusiasts did not want to hear. The FOMC monetary policy meeting has begun, and tomorrow the Fed will let us know whether it will begin tapering asset purchases. Over the last few weeks we learned that unemployment fell to 7.0%, the level the Fed had tagged for slowing tapering. Now today we hear inflation is flirting with us. Bloomberg News ran a survey of economists on December 6 showing that an increased percentage of economists believed the Fed might begin tapering tomorrow (34%); that was up from the November poll showing just 17% in favor. The Fed has certainly given us enough time to digest the possibility that tapering is coming, so it could come at any time now.

Homebuilder sentiment improved according to the survey for November. The Housing Market Index increased to a mark of 58 from 54 the month before. I doubt builders are thinking much about how tapering could raise interest rates, so I would not read too much into this enthusiasm. It’s probably based on the latest gains in New Home Sales, and those could very likely be revised lower. As expectations for the taper meet improved economic data, at some point there should not be much lasting impact to rates. However, mortgage rates are especially vulnerable, because the Fed has been buying mortgage-backed securities, an action that specifically supports low mortgage rates.

Retail sales data picked up on a year-over-year basis this past week. Weather can play a role in this figure, but in the coming two periods, last minute shopping will make this data point clear and likely confirm a strong shopping period overall. I’ll have more to say about the retail industry soon, because an overall gain does not necessarily spell good news for your favorite retailer.

Overseas Markets

EUROPE	CLOSE	ASIA/PACIFIC	CLOSE
EURO STOXX 50	-1.2%	NIKKEI 225	+0.8%
German DAX	-0.9%	Hang Seng	-0.2%
CAC 40	-1.2%	S&P/ASX 200	+0.3%
FTSE 100	-0.5%	Korean KOSPI	+0.2%
Athens ASE	-0.0%	BSE India SENSEX	-0.2%

International markets have caught the Fed watch disease and will even exaggerate the movement of the U.S. market it seems over the next day or two.

Commodity Markets (1:00 PM ET)

WTI Crude	-0.1%
Brent Crude	-0.9%
NYMEX Natural Gas	-0.7%
RBOB Gasoline	-0.2%
Gold Spot	-0.8%
Silver Spot	-0.5%
COMEX Copper	-0.1%
CBOT Corn	+1.2%
CBOT Wheat	+0.3%
CBOT Soybeans	+0.7%
ICE Cocoa	-0.7%
ICE Sugar	-1.5%
ICE Orange Juice Conc.	+0.3%
CME Lumber	+0.0%
CME Live Cattle	-0.1%

Commodities are mostly coming down on expectations of a stronger dollar. Agricultural prices are very likely suffering due to this year’s weather trends. Note that American derived corn, wheat, soybeans and orange juice are higher today on weather, while foreign found cocoa and sugar are lower on the stronger dollar outlook.

Corporate Events

Earnings season will only grow quieter as we near the close of the year. The activity list is hot, though, with many stocks marking big gains and losses today.

HIGHLIGHTED EPS REPORTS
Company	Ticker
TUESDAY
Sanderson Farms	Nasdaq: SAFM
Huntington Bancshares (DIV)	Nasdaq: HBAN

MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
Methes Energies (Nasdaq: MEIL)	+57%
KKR Financial (NYSE: KFN)	+29%
XTL Biopharmaceuticals (Nasdaq: XTLB)	+27%
LightPath Technologies (Nasdaq: LPTH)	+22%
iRobot (Nasdaq: IRBT)	+17%
Broadwind Energy (Nasdaq: BWEN)	+14%
Stereotaxis (Nasdaq: STXS)	+14%
Puma Biotechnology (Nasdaq: PBYI)	+13%
Rick’s Cabaret (Nasdaq: RICK)	+12%
Kopin (Nasdaq: KOPN)	+12%
BIGGEST LOSERS	% Drop
Fiserv (Nasdaq: FISV)	-50%
Medidata Solutions (Nasdaq: MDSO)	-50%
BorgWarner (NYSE: BWA)	-50%
Targacept (Nasdaq: TRGT)	-31%
CombiMatrix (Nasdaq: CBMX)	-21%
FuelCell Energy (Nasdaq: FCEL)	-21%
Rockwell Medical (Nasdaq: RMTI)	-20%
Dynasil (Nasdaq: DYSL)	-17%
Kingtone Wirelessinfo (Nasdaq: KONE)	-18%
CGG (NYSE: CGG)	-16%

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.