It’s been tough sledding for the market but then again even the casual observer probably already knew that. Still if you back out Apple and Boeing the Dow would be close to positive for the session. Meanwhile the price of crude oil holding up and developing an encouraging chart pattern despite crude inventories surging by 8.4 million barrel to 494.9 million – highest level since 1950. I suspect less than expected gasoline inventories were less than expected.
But the problem for the market which is trap in a decidedly downward spiral is where leadership comes from.
One area that has the power to move markets without taking action is the Federal Reserve. In moments Janet Yellen and company will get their chance to weigh in on the state of the economy. They should consider the build in oil, the near-term troubles for Apple and today’s housing numbers but mostly they should acknowledge trends. As for the US economy the main problem is pace of wage growth. In the last jobs report wages declined a penny.
I think Yellen must come out and speak to the notion the Fed is wedded to four rate hikes. Her dilemma is doing so without admitting the December rate hike was a mistake. No matter how clumsy she puts its out investors must come away feeling the Fed isn’t going to make dumb moves out of some strange notion of principle.
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