Unless you've been living under a rock, you'll know that last week the Dow passed its nominal high of five years ago.
There has been much pompom waving in the mainstream media. Even discredited forecasters now feel it's safe to start regurgitating failed predictions of stocks going to the moon.
What a difference one week makes! On Thursday's blog post my title was, "what a difference a day makes". In the headline driven market we find ourselves where fundamental and technical analysis count for little, the impending deflationary death spiral we were confronting early in the week melted away with one comment from ECB President Mario Draghi: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." That last sentence sent global risk assets skyrocketing into the weekend.
Almost every trader and investor will be waiting patiently for the Federal Open Market Committee(FOMC) interest rate decision, that announcement is expected to be released this afternoon. The Federal Reserve Bank Chairman, Ben Bernanke, will hold his second press conference after the Fed funds rate decision is announced.
The major stock indexes are all struggling this afternoon to get into positive territory. The Dow Jones Industrial Average, NASDAQ Composite, and the S&P 500 Index have been sold off sharply by the institutional traders since the beginning of May 2011. The major stock indexes are down by about 7.0 percent since making a new high on May 2, 2011.
Almost every investor is standing by waiting for the Federal Reserve Chairman, Ben Bernanke, to make some type of comment regarding another round of quantitative easing. In other words, will there be QE-3 if the markets keep falling. It is important to note that the key bank lending rate, which is called the fed funds rate, has been at 0% since December 2008. when you add the current U.S.
The markets are floating slightly higher today as the Dollar has fallen sharply once again. Federal Reserve Chairman Ben Bernanke is set to speak at 3:35pm ET today. Knowing this, gave Wall Street a good idea that the markets would most likely see weakness in the Dollar and an up market.
This morning, the major stock indexes are all trading higher on the back of the weaker U.S. Dollar Index(DXY). Last night, the Chinese made comments that they need to increase the strength of their currency and this is certainly one of the reasons for the weak U.S. Dollar Index today.
