The Last Time?
They don’t have much more room left. Short-term
interest rates are already at 2.50%, and with an expected rate cut of .5% to
2.00%, the Federal Reserve is nearing the end of the road in terms of how
much more it can cut rates. A cut to 2.00% will leave short rates at their lowest since
1961.
The Dow is down 27 at 9413, the Nasdaq Composite is
down 2.23 at 1791.42, and the S&P 500 is down 3.38 at 1099.46.
TradingMarkets bond analyst Tony Crescenzi points out
in his commentary today that deflationary pressures exist that are working
to allow both short- and longer-term rates to fall. Still, when the fed funds
rate approaches the rate of inflation, and a cut to 2% would keep short-term
rates below the rate of inflation, that sparks inflation, a situation the
Fed is not on guard against but is certainly mindful of as it approaches the
hour where it will cut rates for the 10th time in one year.
Cisco
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PowerRating) is handing in the best gains among
the largest capitalized Nasdaq stocks after it nudged Wall Street earnings
expectations last night. The world’s largest networker also said revenues
rose for the first time in several quarters and that it was on track for
better business ahead. Cisco is up 1.75% at 18.20.
Stocks are consolidating ahead of the Fed interest
rate announcement at 2:10 PM ET.
Carolyn Boroden in her Futures Perspectives
commentary pointed out last night that the Nasdaq 100
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$NDX.X |
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PowerRating) was
coming into “timing” as well as price cycles that could imply an
intermediate-term top in the all-tech index. The December Nasdaq 100 futures
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PowerRating) also registered a “Turtle Soup Plus One Sell” reversal
signal, which is another indication of downside in the Nasdaq. Turtle Soup
Plus Ones, as well as other proprietary signals and indicators, are available
daily on TradingMarkets.com Futures Indicators Page.
Internets
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PowerRating), +2.54%, and banks
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+1.09%, are the strongest sectors. Oil services
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$OSX.X |
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airlines
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are lagging sectors on the session.