Spooked by the Fed

 | Jan 03, 2013 | 4:35 PM EST
  • Comment
  • Print Print
  • Print

The market was chugging along nicely until the minutes of the latest Fed meeting hit. If you want to spook this market, nothing is more effective than hinting that the Fed's quantitative easing program will end. QE has been a driving force for years, and it is frightening to think that there may not be an endless reservoir of liquidity.

Some Fed members indicated that it might be a good idea for the Fed's bond-buying to end at some point this year, and they are worried that the central bank can't spend $85 billion a month without negative repercussions down the road.

The market has been on a substantial run, so this was a convenient excuse for profit-taking. In the bigger scheme, the selling was extremely mild and it is probably healthy that the recent buying froth stays under control.

Friday morning brings the monthly jobs report, which will be the main market catalyst. What is interesting now is that good news may not be a market positive if the Fed really is serious about letting interest rates rise. It's still a long way to go to hit the Fed's unemployment target, but nothing is more important to the market than QE, and anything that affects how long that program runs will likely produce selling.

I'm not too worried about the market right now, but today's reversal was a slight negative and we'll have to watch the reaction to the jobs news very closely.

Have a good evening. I'll see you tomorrow.

Columnist Conversations

The integrity of the channel parameters on the General Electric GE chart could be a tell as to the short-to-in...
In mid August we added some Dec QCOM calls on a rollup, we take these off now. SOLD QCOM DEC 62.5 CALL AT 6...
Seeing a similar early start to trading as of yesterday.  Open pretty flat follow by reversal, especially...
Not pretty, but former net/net (and current double-net) up 15% yesterday on 2 1/2 times normal average volume ...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.