SubscribeDaily Futures Commentary November 3, 2009
Tuesday, November 3, 2009
The U.S. Dollar is trading sharply higher overnight as investors are once again becoming more risk averse. This week, investors are facing three major central bank meetings and the U.S. employment report. Investors are worried about the central banks removing government stimulus, and its possible negative impact on the economy, particularly the financial sector.
Yesterday, U.S. manufacturing and home sales fueled a rally in the equity markets early in the session, but fear that a recovery in the economy will lead to the government and the Fed cutting stimulus helped kill the rally and break the market. Although the stock indices finished higher for the day, buyers were tentative.
Investors want to know the Fed’s exit strategy before committing to the long side of the stock market. The market appears to believe the Fed will raise rates in the middle of 2010, but is uncertain as to how or when the Fed will start to withdraw stimulus money. This uncertainty triggered profit-taking last week, but yesterday’s action indicates that traders are beginning to get short as traders are now selling …
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