Cliff Watchers on Edge|
U.S. stocks moved lower again on Wednesday as concerns amplify over whether
the U.S. government will reach an agreement to avoid the fiscal cliff on January
1st, actions that have turned investors into full fledged 'cliff watchers'. As
of early afternoon trading on Wednesday, on the New York Stock Exchange, for
every stock that rose, three declined. President Barack Obama will begin
negotiating a budget deal with Congress on Wednesday in an attempt to prevent
more than $600 billion in automatic tax hikes and spending reductions that are
slated to begin in January. Obama is meeting with corporate executives
Wednesday. On Friday, the President will meet with Democratic and Republican
congressional leaders to begin budget discussions.
The Labor Department reported on Wednesday that U.S. wholesale prices fell a
seasonally adjusted 0.2% during October, mainly because of lower costs of
gasoline and motor vehicles. Core wholesale prices fell 0.2% when volatile
categories of food and energy were excluded. Automobile costs fell by the
biggest amount in three years, down 1.6%, partly due to new adjustments in how
the government measures quality improvements in motor vehicles. Energy prices
fell 0.5% during October. Wholesale cost of food rose by 0.4%. On a core basis,
over the past year wholesale prices have risen an unadjusted 2.3% or by 2.1%.
According to reports on Wednesday, former CIA Director David Petraeus will
testify Thursday before a closed-door congressional hearing about the deadly
September 11 attack on the U.S. consulate in Benghazi, Libya. Late last week,
Petraeus resigned as CIA chief over revelations that he had an extramarital
affair with his biographer, Paula Broadwell. Petraeus is likely be questioned
about his relationship with Broadwell and whether she was given access to any
classified military documents. Reports indicated Broadwell has allegedly
admitted to FBI agents investigating the case that she was in possession of such
documents. The documents were retrieved by federal agents during a scheduled
search of her home.
Forex markets trading activity has been sluggish over the past two weeks, partly
attributed to presidential election and the fiscal cliff. Forex traders have
been hugging the sidelines due to sluggish activity. Ahead of upcoming holidays
and until the potential fiscal cliff is resolved, the sluggishness may continue.
According to a report and investigation conducted by a House Financial Services
Committee panel released on Wednesday, decisions made by former head of bankrupt
MF Global, Jon Corzine, sealed the firm's fate which led to the collapse of the
firm and misplacement of $1.6 billion in customer funds. According to the
report, MF Global CEO, Jon Corzine, former co-chairman of Goldman Sachs (GS),
U.S. senator and governor of New Jersey, created an "authoritarian atmosphere."
The report also stated that Corzine insulated MF Global trading activities from
the firms normal risk management review process.
FOMC Minutes from Federal Open Market Committee meeting on October 23 and
October 24 were released Wednesday. In the Minutes, Federal Reserve officials
reported they are closer than previously thought to revamping the central bank's
guidance on what economic conditions would have to be in place, before interest
rates rise for the first time since the start of the financial crisis. The 19
Fed officials "generally favored" the use of economic variables in their
guidance. The Fed is relying on a calendar date, saying it expects to keep rates
near zero until mid-2015. The new approach would be some variant of a plan
offered by Chicago Fed President Charles Evans, who wants the central bank to
tell the market it will keep rates low until the unemployment rate falls below
7%, as long as inflation remains below 3%. The minutes show that a number of
practical issues need to be solved before officials would decide to use these
"economic thresholds." According to the minutes, a number of officials think the
Fed will likely need to buy more assets once its "Operation Twist" stimulus
program wraps up in December. Fed officials could not agree on a consensus
on Day Trading
with confirmed subscription to our Free
Weekly MarketNews newsletter.
Trading Room now open to subscribers.
trial to our Day Trading Rooms
for stocks, futures, forex and futures. Professional Training
Programs available for stocks, futures and forex traders.
trading calls focus on NYSE, NASDAQ and AMEX.
trading calls focus on YM, NQ, TF and ES.
based on New York trading session focus on GBPUSD, USDCAD, USDJPY, EURUSD,
GBPJPY, USDCHF, EURJPY, EURAUD, AUDJPY, CHFJPY, EURCAD, GBPCAD and AUDUSD.
Detailed historic performance for all calls is available on our Market
Opt-in to our free Weekly MarketNews
sent via email, first trading day of the week which includes recap of markets
from previous week and what is ahead for
the upcoming trading week.
Trading Lesson provides new trading subject every month.
Free Chat Rooms - penny stocks, options, stocks, futures and forex! Chat
with other traders any time, day or night, 24-hours a day.
Nov 14, 2012