Late yesterday the Wall Street Journal released a story “Fed Moves Closer to Action” by Jon Hilsenrath, market participants took dramatic notice. After reading the third comment from our internal sources that this may be a leak from the Fed for action we thought it worth mentioning to you. I bet you can see when the story hit the airwaves. Remember summer equals lower volumes and exaggerated moves.
UPDATE–Before this post was able to hit your in box, another story, this one from the New York Times is running a similar article. This means more credibility to the possible move, correctly or incorrectly.
S&P 500 1 minute chart
We will see, but there is certainly reason to believe that the FED often leaks/speaks through reporters. If this story turns true, we would believe this could be a positive for capital markets for a time, but the attached chart shows the fatigue in such sugar injections.
We feel the US is ready to take the training wheels off and ride on our own.
Have a Great Day!
JK
PS Remember today is technology upgrade day at JK Financial !
214-706-4300 http://www.jkfinancialinc.com
Donald Capone
John Kvale CFA, CFP
Thank you Ben, Overconfident on Technology Upgrade, Rise of the Machines – Traveling
In the week that just was, Big Ben scoffed the so-called “Leaks” that we also mentioned and did not add any additional “Cowbell” easing. This is just fine with us as we are hopeful the US can “Take the Training Wheels Off” and ride on its own. The longer Big Ben waits the better we are, in our opinion….no more candy please!
On a personal/office note (one in the same frequently) our mid-week victory technology dance turned out a bit premature as my personal VPN turned up the victim of our new high-speed connection, and refused to play along. After eight hours of tethered connections to our IT folks from home attempting to remotely connect to the office, the issue has been resolved. It is all good! Next step VOIP phones, which are on order and due to arrive in two weeks for an end of August install….fingers crossed.
While much has been mentioned of the recent machine induced spike in trading volumes which occurred on Wednesday morning, we see it as more of a yawner than a concern. HFT (high frequency trading) is here and provides liquidity for those that correctly go to the market to exchange one investment
idea for a hopeful better one. Most do not trade in terms of seconds, but rather years, so while we watch the minute to minute changes for opportunity, we rarely react to such movements. (For the record we have an unwritten rule, not to execute transactions within 30 minutes of the open or close as we have found over the years large variances can occur.)
Traveling for the next few, but of course will be happily tethered (via the eight-hour VPN setup ..ha) to the office.
Have a Great Weekend and a Super Day!
JK
PS Next week some neat announcements including The Best Financial Planner award, a recent interview with Fidelity, and a save the date for our Kids themed Holiday party!
214-706-4300 www.jkfinancialinc.com
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Posted in A Look Back and The Week Ahead, Investing/Financial Planning, Market Comments
Tagged Ben Bernanke, Fed Leaks, HFT