EmailThe Fed policy statement will be released at 12:30 ET. Expectations lean towards an announcement of a third round of quantitative easing (QE3). Market reaction to the announcement and Bernanke's press conference that starts at 2:15 ET could be very volatile.
There is little hope that QE3 would provide much of a boost to the US economy. And a boost is needed. Global economic trends continue to worsen.
The Organization for Economic Development released its leading indicators for major economies and almost all point downwards. The indicators for the US, the eurozone, Japan, and Russia all fell. Italy fell sharply. China and India were flat, while Brazil and the U.K. were up. Overall, the data weren't a disaster, but the reality is that economic trends signal a prolonged global slog - regardless of how many 2-year Italian notes the European Central Bank buys.
New unemployment claims for the week ended September 8 rose to 382,000 from a revised 367,000 the prior week. That puts the four-week moving average at 375,000. The trend is modestly higher over the past couple of months, suggesting labor market conditions are not improving and possibly worsening. This is not good data.
August PPI rose 1.7% as energy prices jumped 6.4%. The core rate in PPI (excluding food and energy) was up 0.2%. Inflation is modest despite the aggravating increases in energy prices, and isn't a focus for the financial markets.
Tomorrow, the focus might have to turn to earnings and economic trends. Neither is encouraging.
Founder and Chairman, Briefing.com
