The MAR14 E-mini S&P 500 is up 10.75 points to 1782, after recent corporate earnings reports, as well as an excellent reading on GDP, sparked investors to buy equities. 1775 is our key support level. Even with the second taper yesterday, the stocks are showing resilience, and climbing this morning.
Overall the GDP growth report matches expectations and offers no consumer shocker, and as such signs of positive growth for 2014 are soothing investors’ wounds incurred in the recent week, sending bond yields marginally higher in response.
U.S. stocks fell, with the Standard & Poor’s 500 Index headed for a one-month low, while Treasuries and the yen gained as the Federal Reserve said it would make further reductions in economic stimulus and as emerging-market currencies weakened. Gold and natural gas climbed.
The January statement released minutes ago is practically identical to the prior month and contains the highly anticipated continuation of measured reduction in the monthly pace of bond purchases. The FOMC voted unanimously, and we don’t recall off hand the last time that happened.
With South Africa and Turkey raising rates to support their currencies, as well as a possible second taper announcement occurring today from the U.S. FOMC, stock markets could be retreating because of these interest rate moves.
Hump day is providing investors with a major speed bump before the market opens. The E-Mini contract is trading down to as low as 1772.25, almost 30-handles lower than the overnight high set just hours ago.