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Stock Ideas Investors Daily Edge Fed Meeting Highlights A Busy Week
Stock Ideas Investors Daily Edge Fed Meeting Highlights A Busy Week 
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Dear Reader, A few weeks ago, I asked you to give me a story about what the government did to piss you off. I got a lot of feedback. Apparently the government is good at pissing everyone off! |
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| Fed Meeting Highlights A Busy Week |
| Monday, 15 September 2008 | ||||||||
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The economic calendar gets off to a quick start this week with two important reports right off the bat at 9:15 this morning. The August Capacity Utilization and Industrial Production reports are both expected to show declines of 0.30 percent versus July. If these reports come in as expected, it means that the manufacturing sector is still mired in a slump, and won’t be leading the turnaround anytime in the near term. The Core CPI and CPI reports for August are announced Tuesday morning well before the market opens. If the August PPI reports are any indication, the Core CPI report will most likely meet expectations, while the CPI report could beat expectations by quite a bit. The market expects Core CPI (excluding food and energy prices) to post a slight increase of 0.20 percent. A silver lining could be that the increases seem to be slowing month over month. The CPI figure is expected to show an actual decrease versus the previous months’ reading. This is most likely due to the continued drop in oil prices, providing consumers some relief at the pump. The Building Permits and Housing Starts reports for August are released on Wednesday. Both reports are expected to continue to show declines, indicating that the housing problems continue. Until the mortgage industry gets the Fannie and Freddie disaster resolved, expect more of the same for the coming months. The biggest item of the week is the FOMC Policy Statement on Tuesday. Currently the market shows a 90 percent probability that there will be no change to the Fed Funds rate. The next highest probability is roughly 10 percent chance of a one-quarter percent cut. The second biggest report is the Philadelphia Fed report on Thursday. The Philly Fed report is expected to show continued contraction, as the reading will be below zero. The anticipated reading of -10 is an improvement since the last report, meaning less contraction than before. The report polls purchasing managers in the tri-state area.
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