FED Meeting Aftermath
Returning to my screens after few days of vacation and couple of days of useless erins. Let me recap economic announcements in the last few days. Housing starts at consensus of 598k, building permits at 579k versus consensus of 583k. We have a 20% rise from the lows a few months ago. House prices rose 0.3% vs. consensus of 0.5%. Important indicator to watch, as seasonal effects ad government stimulus could fade into the winter. Mortgage applications up 12.8%.
Initial jobless claims were at 530k vs. 550k consensus consistent with approximately 250k job losses a month. Continuing claims at 6183k at consensus. Philadelphia Fed and Leading indicators up a bit (or more), but as I already wrote I don’t believe in that stuff.
Much awaited FED meeting for the week didn’t bring anything new, despite rumors claiming surprise decision(s). FED statement. In short no mayor change except extended agency MBS purchases and winding down the program in Q1 2010. The market on other hand reacted with initial upward move, and then closing with largest negative closing in days. Looks like investors don’t really have clear sense of direction and QE and stimulus stories wearing out.
Chart 1. S&P 500
And short intro to the next post. Mayor down move in crude oil both in spot and again re-steepening of contango. “Expected” recovery prompted refiners to increase run rates. Demand for driving was lowest in years and refined products stockpiles remained high during the driving season.
Chart 2. US Crude Oil Futures Curve
