In most cases the first day of a two day fed meeting is, quiet but as the economy and employment continue to expand, the fed has an open window to start raising interest rates. This week several of the world’s central banks will be meeting to decide the future of their ever expanding quantitative easing programs. With it, almost a 100% probability of a rate hike in the U.S., but it’s all going to come down to the fed’s statement and the ‘wordage’. The big question? Is the era of ‘free money’ coming to an end? We think the answer to that question is a big yes, but we aldo do not think that means the end of the rally, or at least not now.
The day started with Hong Kong’s Hang Seng Index down 0.6%, and several other Asian markets closing lower. In Europe the Stoxx Europe 600 was up a modest 0.2%, with energy and technology stocks leaning to the firmer tone of the European indexes. Brent Crude was up 1.4% to $65.58 a barrel, its highest level since 2015, after Ineos shuts down the Forties Pipeline System for several weeks for repairs.
Algo Headline Day
During the U.S. overnight Globex session, the ESHs made a new all-time contract at 2668.00, and a low of 2663.50 with 320,000 ES traded. On the 8:30 CT time futures open the (ESH18:CME) printed 2665.50, up ticked a little, and then dipped under the vwap down to 2663.25, one tick under the Globex low. From there, it double bottomed, and at 10:00 traded all the way up to 2673.00, another new all-time contract high, up 6 handles, after a headline came out saying house leadership indicated its goal for the tax cut vote next Tuesday. But there are a few ‘wildcards’ hanging over the markets right now. The first one is what happens to the Trump agenda now that Roy Moore lost in Alabama?
CNN gives you ‘5 reasons you need to pay attention to the Roy Moore race: http://www.cnn.com/2017/12/11/politics/roy-moore-donald-trump-republicans/index.html
As always, please use protective buy and sell stops when trading futures and options.
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- In Asia 10 out of 11 markets closed higher: Shanghai Comp +0.70%, Hang Seng +1.49%, Nikkei -0.47%
- In Europe 8 out of 12 markets are trading lower: CAC -0.27%, DAX -0.10%, FTSE -0.01%
- Fair Value: S&P +3.23, NASDAQ +21.65, Dow +19.18
- Total Volume: 1.6m ESH & 11.4k SPH traded in the pit
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