All Eyes on the Fed, Change in Language Seems Likely

Tuesday, March 16, 2010

  • Tokyo down 1/3 of a percent, London up a 1/3rd of a percent. US futures up marginally this morning. All the focus today will be on the FOMC policy statement to be released at 2:15. For the past 8 statements, the Fed has said "economic conditions…warrant exceptionally low levels of the federal funds rate for an extended period". I think it's likely they change this language to a more hawkish tone considering the recent raising of the discount rate.

  • I am looking to work myself into a bunch of longs in the next couple days for a strong push through the 1,150 level on the S&P. The market, after a 9% pull-in, bottomed at the beginning of February and pushed back to highs. For the past 2 days, we've sat on highs with relatively low volatility. A minor attempt to sell-off occurred in the late morning yesterday but stocks promptly recovered closing positive for the day. Shorts are trapped and it seems likely we see higher prices sometime very soon. I will look to buy a drop in equities for a swing long should a change in the Fed's statement cause selling pressure.

  • "After paying back about $51 billion from the two most recent transactions, AIG still owes about $50 billion." (The Week)
    -What a long road for AIG. Though I am amazed they've paid back half so quickly. But, it comes at the cost of two profitable units of the AIG empire.
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