— This is the script of CNBC's news report for China's CCTV on December 18, Wednesday.
Welcome to the CNBC Business Daily.
Markets are waiting with bated breath to see if the US Federal Reserve will start cutting back its quantitative easing program. A steady run of upbeat US economic data points in recent weeks suggests that the timing could be appropriate for the Fed to wind down stimulus. And according to a Reuters poll, that could happen, well, if not today, then sometime as soon as January, instead of March as was previously thought.
So what's the best way to position your portfolio IF and When the Fed starts to taper. Here's what some analysts told CNBC:
[Soundbyte on tape by Bruno Del Ama, CEO, Global X Funds] We are not of the opinion that there be taper tomorrow, but certainly a lot of volatility. Coming into next year, we think that we'll have a strong year as the economic data is fairly positive. So from our perspective, perhaps an opportunity to pick up some stocks on the cheap if you play that volatility. Certainly, to the extent that there is a taper announced, that will clearly have a negative impact on the market tomorrow.
[Soundbyte on tape by Peter Cardillo, Chief Market Economist, Rockwell Global Capital] I think that if the Fed does announce that there are going to begin a pullback, or at least announce that they will do it in January, I think the market will welcome that.
[Soundbtyte on tape by Axel Merk, President & CIO, Merk Investments] Ultimately, the Federal Reserve, let them taper, let them not taper - it doesn't really matter. What we need is clarity on where they want to go and we're not going to get that.
And what does an unwinding of stimulus by the Fed mean for currency markets and the greenback? Here's some views. Have a listen:
[Soundbyte on tape by Michael Every, Head of Financial Markets Research Asia-Pacific, Rabobank] If we do see the Fed more optimistic, but cautiously flagging that tapering will be happening soon, I don't think we're going to get too much of a reaction in forex either. But if we're talking about the outlook for the US dollar in 2014 from a structural perspective, then yes, we think it will be moving higher.
[Soundbyte on tape by Vassili Serebriakov, Currency Strategist, BNP Paribas] I think ultimately for the dollar, if the Fed doesn't taper, this may mean the dollar should be okay.
Li Sixuan, reporting from CNBC's Singapore headquarters.