What is the correlation between the FED rate and the stock market?
Is it just perception?
My personal belief is that there is absolutely no correlation whatsoever, and regardless of the stock market moves after the FED action or non-action it will be seen as a causal relationship.
If someone has some hard info on a relationship I would really like it, I am currently short in a few sectors of the market.
In all reality, the FED should not have much of an impact on the market…HOWEVER !!!.…This is market is NOT reality, The FED (FOMC) has a PROFOUND effect on the market.
Some"Bears" consider this "Arson"…..Igniting a false rally
I'll leave it up to you to discover why …There are thousands upon thousands of pages digitally written on this very topic
Now Get To It !!
PS. A hint:…If you dont have an opinion on what Bernanke will do tomorrow I HIGHLY suggest you get OUT of the market and sit on the sidelines until you do…..This is a powder keg right now.
Good post. Good advice! I think I will liquidate bear positions tomorrow morning. I have been thinking about it all day. After i see no false rally ignited by FOMC, then I restablish those bear positions.
I think it unlikely but still possible that the Fed could suprise with a very agressive rate cut (at least 0.75 pt)
I would doubt a rate cut ….. I think Greenspam is making the talk show circuit touting his new book and kinda offering an apology of sorts to the American Homeowner…… that is going to get shafted ….maybe the shafting will begin tomorrow with a rate HIKE….My opinion only
60/40 in my mind at this point for a hike, I have no opinion worth defending with my dollars…Im on the sidelines now…cash in bank account…MY bank account…ready, poised and waiting to see what fireworks we'll see tomorrow.
LookoutBelow, I also am foreseeing a rate hike, as I believe the FED is more interested in appeasing foreign investors and protecting the dollar than a rate cut that will likely have little positive effect on the economy.
I have a strong belief that the FED will act prudently in this case and not succumb to pressures from individual industries.
Herewego I’m with you on that one. The futures are showing only a 40% chance of 50 bps cut. The FED is going to use the discount window as its primary tool for the credit crunch. Greenspan gave Bennie some cover indicating that we have more inflationary pressures today that limits the FED’s ability to cut the FED funds rate. I don’t know how the market will react but you can be sure the next debt bomb to go off after this FED meeting will have a significant impact on the market. I am not getting the feeling that anything has truly stabilized.
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