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Daily Market Update – September 21, 2016 (7:30 AM) The Japanese stock market was barely 2% higher this morning as the Bank of Japan announced a change in monetary policy that was reminiscent of what the Federal reserve did a number of years ago as it focused on the yield curve. All of that is far too complex for me to understand, but somehow the decision in Japan eases the way for the FOMC to do something, as the US would no longer stand to be the only major economy to be in a position to preside over increasing rates. But still, as this morning is set to begin, no one is then expecting the FOMC to announce an increase in rates this afternoon. Maybe that’s why stock futures are guardedly higher this morning. But the Bank of Japan’s decision really does open the door for the FOMC to make a decision to raise rates today seem far more logical and with much less market related risk. It’s just not expected. At this point, there still would be some reason to welcome an interest rate increase, if only to get all of this focus to come to its end and to get us to focus on what matters. It seems as if it has been a very, very long time since we have focused on those things that are important. regardless of what the decision will be today and what specific words will be used in the statement, before you know it, someone will realize that there are now only 9 days left to come to some budget agreement or face another government shut down. It’s inconceivable that would happen, but that has to be where we will get mis-directed next. For now, we will still put our focus onto the news coming at 2 PM and then figure out how much reverse psychology will be in store for all of us at the moment of the news release and then immediately after, not to mention over the next few days. The market wants to party, but it will need news of no increase and no overly hawkish words or perceived threats in the ensuing statement. |
