An upgrade to QE2 from the Fed. Recall that in the prior FOMC minutes the Committee indicated they may need to take more initiatives; they said: "The Committee would need to consider steps it could take to provide additional policy stimulus if the outlook were to weaken appreciably further."
They did just that today. Just look at the headlines:
1) members believe "accommodation may be appropriate before long"
2) FOMC members concerned about slow growth, slow decline in unemployment
3) several Fed members concerned sluggish growth exposes economy to potential negative shocks
Stocks moved up modestly, then back down. Why? Because traders have been buying ahead of an anticipated QE2 announcement for weeks.
Also: we are now on top of earning season...traders will want more clarity from CEOs. Early signs (September retail sales) were encouraging.
So, for example: tech is cautious before Intel tonight (INTC a HUGE underperformer in the last two months), and materials underperforming because of the dollar strength.
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