So, that’s it. Seven years and $4.4 trillion later, the U.S. Federal Reserve will exit quantitative easing, despite what a few Fedsters have said about the possibility of QE4. Let’s remember that third sequels rarely, if ever, are satisfying, they tend to meet with shrugs from audiences, and don’t often include the original cast of characters. “Alien Resurrection” ring a bell? That’s what QE4 would be. But I digress.
After a few weeks of freaking out – from a toxic stew of weak European and Chinese data, uncertainty over the threat of a big Ebola outbreak, and some calculated, questionable chats from Fed officials that mostly confused people – the panic appears to be over.
NEW YORK (Reuters) – Investors stung by plunging oil prices and energy stocks may find relief right around the corner: A Republican-led U.S. Senate could well jump-start energy-friendly policies that would shore up the beaten-down sector.
Political oddsmakers say Republicans should win the Senate in next week’s mid-term elections. Although major reforms on big issues like taxes or immigration are thought unlikely, GOP control of Congress could see laws advanced in a handful of areas, with energy topping the list.
Few political developments in the last several months have been more binary than Brazil’s presidential election. It has been more polarized than the Federal Reserve, the European Central Bank, the Ebola scare, the U.S. Midterm elections, Ukraine and what-have-you.
With the narrow re-election of Dilma Rousseff over centrist candidate Aecio Neves, it wouldn’t be all that crazy to expect the Bovespa stock exchange to go through an extended round of weakness, not just on Monday, but for a few days after that, given the prevailing view of Rousseff’s policies as being lousy for markets.
Fear remains in the markets and it is being tested again following the diagnosis of a New York-based doctor with the Ebola virus. Even though there are just nine documented cases of the deadly disease on U.S. soil so far and just one death.
Relating all of this to markets can’t help but seem myopic and flippant, but it cannot be ignored, either. So the best method is to merely present the information and move on. U.S. stock futures dipped around 8:30 p.m. ET after news that the test had come back positive – about a 0.5 percent drop. That’s similar to the activity during the day’s trade when the first news of the doctor hit through the New York Post.
Apple ain’t what it used to be, at least in terms of how investors see it. That is probably a decent thing for those who still believe in the growth story.
The company, which reports results after the close today, is still the most valuable in the nation by market capitalization. And yet, by a number of considered metrics, the stock falls far short of where it’s been in the past.
We may be seeing some sort of return to calm, at least on some levels. General Electric’s results have futures moving higher – the stock is up 3 percent in premarket action – and there’s a general sense that some of the selling has exhausted itself, at least for the time being.
After several days of rapidly careening lower, the market seemed to hit its washout moment late Wednesday, when a torrent of selling pushed the 10-year Treasury to 1.86 percent and more than 4 million S&P e-mini futures contracts changed hands.
There’s a glut of various stresses operating in the markets right now: Europe’s inability to get out of its own way, the sharp fall in oil prices that probably says more about supply issues and lackluster demand in Asian markets than the United States, the uncertain path of the Federal Reserve and a nagging concern that weak inflation figures show the economy really isn’t healing all that much.
But make no mistake about it – Ebola is a pressure point for markets at this moment, and one only need look at the “scare” moments in markets to really see it.
The equity market stabilized on Tuesday but only just barely – a 0.16 percent gain on the S&P 500 is nothing to write home about – but that the market bounced off support levels around 1,876 was notable enough.
One thing for sure is that the short-sellers are finally having their day in the sun after many years of walking around with a cloud over their heads, a la Joe Btfsplk from the L’il Abner comic (yeah, we’re busting out Depression-era references here), as Svea Herbst and Jenn Ablan reported in an overnight story.
Time to sit up and pay attention. Monday’s end-of-day regurgitation of 100,000 futures contracts in a five-minute span around 3:30 p.m. (1930 GMT) would have been more nerve-wracking had we not already seen the same thing writ small, when about 30,000 contracts were dumped in the waning seconds of last week’s trading action.
In each case, the activity was striking and a bit disturbing. See, it’s never a great sign when the only thing that ends the selling on a given day is the moment when they turn the machines off (a la Randolph and Mortimer Duke), and Monday wasn’t all that much different.
The focus as we head into this week is earnings, with about 10 percent of the S&P 500 set to report results. That represents about 19 percent of the market capitalization, with reports from Intel, Wells Fargo and several banks coming in the next few days.
But it’s the chipmakers that have people excited; or rather, on heightened alert after Microchip Technology surprised investors last week with a warning that suggests a further slowing in chip demand worldwide.