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“It’s amazing what you can accomplish if you do not care who gets the credit.” – Harry S. Truman
It’s Taper Time. At least that’s what most investors are expecting to hear this afternoon when the FOMC releases its policy statement and chair Powell holds his press conference. The only questions now seem to be when it will start and how long it will take to completely wind down. A delay in the start to December would be considered dovish at the margin while any plan to wind asset purchases down in less than six months would be taken as a hawkish stance. In addition to asset purchases, investors will be looking for signs of when Powell and the FOMC is thinking the first rate hike will take place (the current assumption is for the end of 2022).
Outside of the FOMC, the October ADP Private Payrolls report came in better than expected, and ISM Services will be released at 10 AM. Besides the economic and earnings flow. throughout the day, market watchers will be trying to assess what impacts last night’s election results will have on policy coming out of Washington.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
With a number of major averages hitting record highs yesterday, one area of financial markets that has been taking a breather over the last week is commodities. Of the commodity-related ETFs in our Trend Analyzer, every single one of them with the exception of the DB Agriculture Fund (DBA) has traded down over the prior week ending Tuesday. The weakest of these commodity-related ETFs is the US Natural Gas Fund (UNG) which has declined more than 7% while another six are down more than 1%. Despite the recent weakness, though, it’s important to keep in mind just how well many of these ETFs have performed in 2021. UNG is still up more than 100% YTD while other energy-related ETFs are up more than 70%.
The laggards this year have been precious metals. Silver (SLV) is down by double-digit percentages YTD, the Precious Metals ETF is down over 8% and gold-related ETFs are all down between 6% and 8%.
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