The futures are pointing to a lower opening this morning. There are a lot of stories making the rounds today, some good, some bad. The market has had some rough sledding of late and last week’s sell-off took the Dow below 12,000 for the first time since mid-March.
Housing remains weak, and oil continues to rise, two combinations that have dealt a big blow to the economy and investor enthusiasm. The dollar remains stuck in neutral and the Fed needs to do something. Now. Former U.S. Federal Reserve Chairman, Alan Greenspan, went on record this morning saying the U.S. economy was “on the brink” of a recession and that the chances of the economy falling into recession were more than 50%. Yikes.
The Fed is beginning a two-day meeting to determine whether to change its key federal funds rate or keep it on hold and we can expect some sort of market moving news on Wednesday. Some wish the Fed’s next move would be to cut interest rates, but that such a move is probably not going to happen. With today’s lower opening, it is clear the market will be anxious and nervous at the same time about what the Fed will say tomorrow.
One talking head says if the Fed gets it right from here on out, the Dow will rally 2,000 points to 14,000. That is a pretty bold statement but either way we’ll find out something at 2:15PM on Wednesday.