A heavy news docket heralded the start of a new month, starting with today’s Fed policy announcement. Included in the mix is, of course, the big-stock earnings reports from the likes Facebook (FB), while tomorrow the Republican-led government is expected to divulge the details of its “massive, wonderful, beautiful” tax plan. We will also find out who the next Fed chairman will be.
Today the Fed came out and did nothing, as expected. The Fed paid its usual lip service to the alleged timeline for paring back its balance sheet. However, I would note that in October, the month in which the Fed was supposed to begin cutting back its balance sheet, the Fed’s own reported balance sheet numbers show an increase of about $10 billion on its balance sheet. As someone pointed out, you can’t taper a Ponzi scheme.
So, the swirl of liquidity remains, and this has continued to drive stocks higher, although the indexes did run into some stalling action off the highs today on higher volume. The NASDAQ Composite Index moved into all-time high price territory this morning but stalled to close down in the lower half of its daily trading range on barely more volume compared to yesterday.
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