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Tickers in this Article: NKE, ORCL, FDX
Monday, December 16, 2013

The Fed meeting this week remains the dominant issue for the markets, with investors unable to handicap whether the FOMC will announce the ‘Taper’ decision on Wednesday or blink once again as they did back in September. Minutes of the September FOMC meeting showed that decision to be a close one and this week’s decision will likely be no different.


Pre-open sentiment today remains positive after a number of down days, with markets in Europe up on favorable factory sector data and Asian markets responding negatively to underwhelming PMI numbers out of China.

The two-day FOMC meeting getting underway on Tuesday will also bring the members’ updated economic forecasts and the Bernanke press conference Wednesday afternoon. Today’s positive pre-open mood notwithstanding, markets have been weak lately on concerns of greater Taper odds this week. The bipartisan budget deal that was approved by the House last week and is expected to receive the upper chamber’s nod this week, statements to the contrary from a number of GOP senators notwithstanding, is helping remove the fiscal overhang that was supposedly a concern for the FOMC at the September meeting.

The Fed is obviously in the spotlight this week, but we have plenty of housing sector data and a number of earlier Q4 earnings reports coming out this week. Oracle (ORCL), Nike (NKE) and FedEx (FDX) are among the more notable earnings releases this week, while Housing Starts, Existing Home Sales, and the homebuilder sentiment index will give us the housing sector’s pulse. CPI, Industrial Production and the read on the Q3 GDP are the major economic reports on tap this week.


A lot is happeninig in this final major week of the year, but whether the market will revert back to its historical seasonal behavior or not will be a function of what the FOMC does Wednesday afternoon.

Sheraz Mian
Director of Research


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