Traders brace for Fed taper amid earnings flurry
BNN Bloomberg
Investors around the globe are bracing for tomorrow’s Federal Reserve decision, while wading through the latest batch of corporate earnings.
Investors around the globe are bracing for tomorrow’s Federal Reserve decision, while wading through the latest batch of corporate earnings.
Equities were mixed as a third straight record close for the S&P 500 -- its 60th this year -- had some technical indicators flashing signs of caution. With policy makers expected to announce they will start scaling back their massive asset-purchase program, economists surveyed by Bloomberg are closely divided on whether a rate hike will be next year or early 2023, with a slim majority estimating the latter timing.
“The Fed has managed expectations perfectly in terms of preparing the markets for what is likely to be speed tapering,” said Win Thin, global head of currency strategy at Brown Brothers Harriman. “Most officials seem to agree that it’s better to get tapering over as quickly as possible in order to leave the Fed maximum flexibility to hike rates when needed.”
Some corporate highlights:
Not only is the S&P 500 pushing the limits of its trading envelope -- built around moving price averages -- but the widening of its upper and lower bands can also be a precursor to greater swings. Furthermore, the S&P 500’s 14-day relative strength index is on the cusp of breaching 70, seen by some traders as a threshold for being considered overbought.
