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Getting Ready for Grinchy Greenspan - Money Matters for 12/12/05
Traders took a look around today and saw little reason to do much of anything, keeping stocks in a relatively restrained range on moderate volume in advance of the FOMC meeting tomorrow.
As has been the case all along, everyone fully expects Greenspan and his fellow governors at the Fed to hike rates one quarter of a point for a 13th consecutive time, though some Fed watchers are holding out faint hope that the release accompanying the hike will include some language indicating that the rate increases are nearing an end.
That's probably a lot to ask from this creepy horde of financial wizards. For one thing, the other bunch of creeps - oil traders - are keeping crude prices as high as they can, capitalizing on the busy driving weeks in advance of Christmas. Crude prices were up nearly $2 today, spiking to $61.30 a barrel at the close.
For another thing, the Fed isn't going to change their stance much with the old maestro Greenspan less than two months from retiring. That will be left up to his replacement, inflation-loving Ben Bernanke, who will go into a neutral stance at the earliest possible moment, that being sometime between January 31 and February 1, or, as soon as he is secure in the chairmanship (the Senate still has to approve him).
So, the Wall Streeters really had little on which to hang their hats today. Retailers are being unusually coy about holiday sales figures, though most indications are that expensive luxury stores are faring better than run-of-the-mill retailers and discounters. Big surprise there. With the middle class squeezed more than ever, the people who actually have money to burn are buying. The rest are waiting for bigger discounts or not buying at all.
With less than 2 weeks left in the holiday shopping season, time in running out for rosy pronouncements from the retail sector, as it is on the overhyped Santa rally, that actually took place a month ago.
After tomorrow's Fed announcement the remainder of the year will either be a see-saw affair or a general selling season. There's nothing much to get excited about as today's trade - and the previous December sessions - have amply proven.
The gauges to keep one's eyes on are the usual suspects - the advance-decline lines (which were barely positive today) and the new highs-lows, which continue to defy gravity, an act which cannot continue indefinitely.
Dow Jones: -10.81; 10,767.77 close
NYSE Advancers: 1754
Nasdaq Advancers: 1517
NYSE New Highs: 173
Nasdaq New Highs: 144
Gold: +1.30; 531.50 close
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