In the US stocks moved slightly higher as most investors wagered that Ben Bernanke will rein in his bond buying program later today. A long term Fed analyst had the following to say on today’s announcement from the Federal Reserve.:
“The best thing the Fed might do is something like this: we’re going to take 85 to 75 or 70 [billion dollars per month in asset purchases] and at the next meeting if things go well we’re going to take it to 60 and the next meeting we’ll go to 50 or whatever, and a year from now we’ll get to zero, and we reserve the right to change our mind.
The latest statistics on US poverty offer a sobering view of an economy still stuck in neutral despite all the money the Fed has artificially injected into the economy. 46.5 million Americans are said to have lived in poverty last year, largely unchanged from the 46.2 million figure quoted from the year before by the US census bureau. The median annual income is also essentially flat at just above 51,000 USD.
Staying with the US economy, consumer prices proved to be quite steady in the month of August, but Americans have to dig deeper to make their healthcare and rent. In the meantime, home-builder sentiment was shown to stall in September after a four month period of gains. Builders are said to be worried that a spike in mortgage rates will frighten off new buyers.
Now for corporate news. Boeing is attempting to move forward by making an additions to the company’s dreamliner fleet of commuter aircraft. The 7879 made its debut this month, it is longer, has greater passenger capacity and can also travel longer than the 7878, the older model hit the skies in 2011. The world will be watching closer to ensure that the new model does not make the same safety errors that the old one did. Investors seem to be on Boeing’s side on this one, the company’s stock having risen to an all-time high.
European traders have slowed the pace of their own trading after lackluster car-sales in the region pointed to a slowdown in the European auto-industry.
Trade for the day will definitely be to go long on EUR/USD or for the binary traders a sizable CALL trade, in advance of this afternoon’s Fed decision, which will be made at around 7:30 pm GMT + 2