19 March 2014 AMC- Market broke down after FOMC Statements on Tapering

19 March 2014 AMC- Market broke down after FOMC Statements on Tapering

Market Summary 

European Markets Closing Prices

European markets are now closed; stock markets across Europe performed as follows:

·         UK's FTSE: -0.5%

·         Germany's DAX: + 0.4%

·         France's CAC: -0.1%

·         Spain's IBEX: + 0.4%

·         Portugal's PSI: -0.1%

·         Italy's MIB Index: -0.3%

·         Irish Ovrl Index: -1.2%

·         Greece ATHEX Composite: -0.4%

Before Market Opens

S&P futures vs fair value: +0.60. Nasdaq futures vs fair value: +2.00.
The S&P 500 futures hover right above fair value.

The major Asian bourses ended on a mixed note. Japan's trade deficit narrowed to JPY1.13 trillion from JPY1.76 trillion (expected JPY890 billion). While the deficit was the largest ever for the month of February, the numbers improved from last month as exports jumped 9.8% (consensus 12.4%, prior 9.5%) and imports expanded 9.0% (expected 7.4%, last 25.0%). The trade deficit marked the 20th consecutive negative current account reading and was the eight below-consensus reading out of the last nine. 

·         Japan's Nikkei gained 0.4%, climbing to a one-week high. Robotics maker Fanuc rallied 3.2% after trade data showed exports to China improved. 

·         Hong Kong's Hang Seng shed 0.1%. Galaxy Entertainment lost 2.8% after its quarterly results disappointed. 

·         China's Shanghai Composite settled lower by 0.2% after erasing the bulk of its losses into the close. Property shares were a drag as China Vanke lost 4.0% and Poly Real Estate gave up 2.8%. 

The major European indices trade mixed with Germany's DAX (+0.6%) in the lead. Participants received a handful of data points. Eurozone Labor Cost Index increased 1.4% year-over-year (prior 1.1%); Great Britain's Claimant Count decreased 34,600 (expected -25,000, prior -33,900) while the unemployment rate held steady at 7.2%, as expected; and the French current account deficit widened to EUR3.90 billion from EUR1.20 billion.

Among news of note, the minutes from the latest Bank of England policy meeting indicated a unanimous vote to stay the course, keeping the benchmark interest rate at 0.5%. 

·         Great Britain's FTSE trades lower by 0.1%. Miners are on the defensive with Anglo American, Antofagasta, and Glencore Xstrata showing losses between 1.7% and 2.5%. Defense contractors BAE Systems and Rolls Royce outperform with respective gains of 3.0% and 1.6%. 

·         France's CAC trades higher by 0.1% with growth-sensitive names in the lead. ArcelorMittal and Technip are both up close to 2.0% apiece. Consumer names Pernod Ricard and LVMH Moet Hennessy Louis Vuitton lag. Both names are down near 1.0%. 

·         Germany's DAX holds an advance of 0.6% with BMW in the lead. The carmaker has surged 7.7% after issuing upbeat guidance. On the downside, producers of basic materials are among the laggards. HeidelbergCement and Lanxess are down 1.5% and 0.7%, respectively.

U.S. Equities

·         Futures point to little change at the open as traders await this afternoon's FOMC rate decision and accompanying Yellen press conference

·         The S&P 500 has rallied 1.7% over the past two sessions and is threatening record highs near 1880

·         Current Account Balance (-$81.1B actual v. -$87.6B expected)

o    S&P Futures +2 @ 1866

o    Dow Futures +13 @ 16,275

o    Nasdaq Futures +5 @ 3700

Asia

·         The major Asian bourses ended mixed. 

·         Japan's trade deficit narrowed to JPY1.13 trln (JPY0.89 trln expected, JPY1.76 trln previous). While the deficit was the largest ever for the month of February, the numbers improved from last month as exports jumped 9.8%.

·         Japan's Nikkei (+0.4%) climbed to a one-week high.  

·         Hong Kong's Hang Seng (-0.1%) ended little changed. 

·         China's Shanghai Composite (-0.2%) rallied into the close, erasing the majority of its losses. 

·         India's Sensex (UNCH) finished flat. 

·         Australia's ASX (+0.2%) closed on the highs.

Market Internals

Market Internals -Technical-
The Dow closed down 114 (-0.70%) at 16222, the S&P 500 closed down 11 (-0.61%) at 1861, and the Nasdaq closed down 26 (-0.59%) at 4308. Action came on mixed volume (NYSE 650 mln vs. avg. of 707; NASDAQ 2001 mln vs. avg. of 1872), with decliners outpacing advancers (NYSE 779/2354, NASDAQ 955/1711) and new highs outpacing new lows (NYSE 121/23, NASDAQ 126/13).

Relative Strength: 
Volatility-VXX +1.96%, Sugar-SGG +1.29%, Grains-JJG +1.22%, U.S. Health Care-IHF +1.17%, Copper-JJC +0.78%, Egypt-EGPT +0.73%, Columbia Index-GXG +0.70%.

Relative Weakness: 
Junior Gold Miners-GDXJ -5.12%, Silver Miners-SIL -4.21%, South Africa-EZA -4.07%, Middle East and Africa-GAF -3.90%, Russia-RSX -3.53%, Coffee-JO -3.42%, Copper Miners-COPX -3.15%, Poland-EPOL -3.10%, Thailand-THD -3.00%, Nuclear Energy-NLR -2.28%.

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Closing Market Summary: Stocks Slide While FOMC Keeps Participants on Their Toes
The major averages finished the Wednesday session in the red with small caps displaying the largest decline. The Russell 2000 lost 0.7% while the S&P 500 settled lower by 0.6% with all ten sectors ending in the red.

Equity indices did not show much change during the first half of the session as participants awaited the latest policy statement from the Federal Reserve, but activity picked up considerably after the release of the directive. Confusion may have also played a part in today's trading activity as the FOMC statement represented the most wordy directive on record.

As expected, the Federal Open Market Committee announced another $10 billion taper, reducing the size of its monthly asset purchases to $55 billion ($25 billion in agency mortgage-backed securities and $30 billion in longer-term Treasuries). In addition, the Committee opted to drop the 6.5% unemployment threshold from its forward guidance while choosing to shift the focus to a ‘wide range of information' on jobs as well as inflation.

Although the stock market dropped to new lows immediately following the statement, those losses were limited with the S&P 500 trading roughly five points below its flat line. The benchmark index tried to claw its way back to the flat line, but was unable to do so with selling pressure accelerating after Ms. Yellen gave an interesting answer to a question regarding a portion of the policy statement.

In response to a question as to what the Fed means by "considerable time" for keeping the current target range for the federal funds rate after the asset purchase program ends, Fed Chair Yellen said "probably six months." Selling activity accelerated after the remark and the fed funds futures market, which, last week, expected the first hike to take place in July, saw the expectations shift to April.

Treasuries plunged to lows after the FOMC announcement and continued their retreat during Ms. Yellen's press conference. The benchmark 10-yr yield was up as much as 11 basis points at 2.79% before retreating to 2.77% by the close, representing a nine-point increase.

The big spike in yields weighed on the rate-sensitive utilities sector (-1.5%), which ended at the bottom of the leaderboard. The remaining countercyclical groups were mixed with respect to the broader market as consumer staples (-0.9%) lagged while health care (-0.4%) and telecom services (-0.4%) outperformed.

On the cyclical side, energy (-0.9%), industrials (-1.0%), and materials (-0.9%) bore the brunt of the selling while the remaining groups held up relatively well. Consumer discretionary (-0.6%) and technology (-0.5%) displayed losses comparable to the benchmark index while financials (-0.2%) outperformed as higher rates should translate into improved net interest margins. Bank of America (BAC 17.44, +0.25) and Citigroup (C 48.94, +0.80) settled higher by 1.5% and 1.7%, respectively, while regional banks also displayed strength. The SPDR S&P Regional Banking ETF (KRE 41.62, +0.27) gained 0.7%.

Volatility protection was in demand as indicated by a 4.1% increase in the CBOE Volatility Index (VIX 15.12, +0.60).

Despite the busy afternoon, participation was on the light side with just over 650 million shares changing hands at the NYSE.

Today's economic data was limited to two data points. The fourth quarter current account deficit totaled $81.10 billion while the Briefing.com consensus expected the deficit to hit $87.60 billion. The third quarter deficit was revised to $96.40 billion from $94.80 billion.

Separately, the weekly MBA Mortgage Index fell 1.2% to follow last week's decline of 2.1%.

Tomorrow, weekly initial claims will be released at 8:30 ET while February Existing Home Sales, February Leading Indicators, and the March Philadelphia Fed survey will cross the wires at 10:00 ET. 

·         Russell 2000 +3.2% YTD 

·         Nasdaq Composite +3.1% YTD 

·         S&P 500 +0.7% YTD 

·         Dow Jones Industrial Average -2.1% YTD

Commodities

Closing Commodities: Copper Futures Rally Off LoD

  Copper futures rallied 4.2% off its session low to touch $3/lb. It finished the pit trading session at $2.99/lb, up $0.04.

  This is something to watch given the move and the fact that it's back around the $3/lb mark

  Crude oil, copper and natural gas futures all closed just under today's highs

  Crude oil climbed off its morning lows and finished the day up 219 cents higher at $99.15/barrel

  Apr natural gas rose 3 cents to $4.49/MMBtu

  Gold was weak all day and lost $17.50 to $1341.50/oz. May silver fell $0.03 to $20.82/oz

 COMEX Metals Closing Prices; Copper futures rally 4.2% off LoD to $3/lb, ending the day higher

·         Apr gold fell $17.50 to $1341.50/oz

·         May silver fell $0.03 to $20.82/oz

·         May copper rose $0.04 at $2.99/lb

CBOT Agriculture and Ethanol/ICE Sugar Closing Prices

·         May corn rose 2 cents to $4.88/bushel

·         May wheat rose 24 cents to $7.16/bushel

·         May soybeans rose 12 cents to $14.31/bushel

·         Apr ethanol rose 14 cents to $2.70/gallon

·         May sugar (#16 (U.S.)) rose 0.07 of a penny to 22.00 cents/lbs

NYMEX Energy Closing Prices

·         Apr crude oil rose $0.29 to $99.15/barrel

·         Apr natural gas rose 3 cents to $4.49/MMBtu

·         Apr heating oil fell 1 cent to $2.90/gallon

·         Apr RBOB fell 3 cents to $2.86/gallon

Treasuries

Yields Surge as Fed Trims Asset Purchases, Rewrites Forward Guidance: 10-yr: -30/32..2.781%..USD/JPY: 102.49..EUR/USD: 1.3820

·         Treasuries closed on their lows as heavy seeing engulfed the complex following today's FOMC decision, which saw the Committee announced a $10 bln taper to its asset purchase program and an alteration to its forward guidance. Click here to see an intraday yields chart.

·         Maturities across the complex drifted little changed throughout the morning, seeing little response to the narrower than anticipated current account deficit ($81.1 bln actual v. $88.0 bln expected, $96.4 bln previous). 

·         Some light selling surfaced ahead of the decision with yields ticking to session highs (+2bps). 

·         Heavy selling developed as the Statement crossed the wires, indicating the Committee trimmed its asset purchase program another $10 bln ($55 bln per month) while tweaking its forward guidance to "take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments." 

·         Selling weighed heaviest on the belly of the curve where yields surged as much as +15bps. 

·         Up front, the 2y rallied +7.3bps to 0.424%. The yield closed at a two-month high as action threatens levels last seen at the beginning of the year.

·         A +14.7bp surge in the 5y ran the yield up to 1.695%. Traders will be watching the 1.725% area in the days ahead as trendline resistance off September highs lurks in the vicinity.

·         Selling had less of an impact on the 10y, which tacked on +9.1bps to close @ 2.772%. Today's weakness ran the benchmark yield above both its 50 and 100 dma, and to its highest close in a week. Resistance in the 2.800%/2.825% region is now in focus. 

·         At the long end, the 30y outperformed, +4.3bps @ 3.670%. Post-FOMC selling caused the yield on the long bond to 3.700%, but action so far has not been able to retake resistance aided by both the 50 and 200 dma. Notable is the recent ‘death cross' that has developed on the 30y chart as the 50 dma slipped below the 200 dma.

·         Aggressive flattening developed in the 5-30-yr spread, which narrowed to 197.5bps (~208bps previous). 

·         The 2-10-yr spread widened to 235bps (232.5bps previous).

·         Precious metals were hit hard as gold fell -$28 to $1331 and silver slumped $0.27 to $20.59. 

·         Data: Initial and continuing claims (8:30), existing home sales, Philly Fed, and leading inventories (10) cross the wires.

Next Day In View 

Economic Commentary

Economic Summary: Fed tapers by $10 bln to $55 bln in monthly purchases and drops employment threshold; Janet Yellen says 'considerable period' is probably around 6 months
Economic Data Summary:

·         Weekly MBA Mortgage Applications -1.2% vs Briefing.com consensus of ; was -2.1%

·         Fourth Quarter Current Account Balance -$81.1 bln vs Briefing.com consensus of -$87.6 bln; Third Quarter was -$94.8 bln

Fed/Treasury Events Summary:

·         Fed tapers asset purchases by $10 bln and dropped employment threshold as most expected.

o    Statement

§  Asset Purchases: . In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in April, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $30 billion per month rather than $35 billion per month.

§  Forward Guidance:  In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.With the unemployment rate nearing 6-1/2 percent, the Committee has updated its forward guidance. 

o    Economic Commentary:

§  Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions.

·         Economic Projections

o    See prior comments under ECONX for detailed charts

·         Janet Yellen Press Conference

o    She said change in forward guidance does not change Fed direction.

o    She said weather has made assessing strength of the economy 'especially challenging'.

o    She said the Fed knows it is not close to meeting its jobs mandate; said the Unemployment Rate is a good indicator but does not provide a full picture; said  committee believes forward guidance has been effective; said  market wants to understand beyond when a threshold is met; says this change was done to provide further information on the Fed's outlook.

o    She was asked about slight upward drift for rate expectations- said tods assessment with December is 'virtually identical'; notes Fed member shave expressed a number of opinions on the likelihood of the direction of rates...feels confident it can keep inflation from undershooting targets.

o    She was asked to define 'considerable period' language in the statement.  She indicated about 6 months, but the Fed is still data dependent (would note that 13 out of 16 members see policy firming in 2015).

Upcoming Economic Data:

·         Weekly Initial Claims due out Thursday at 8:30 (Briefing.com consensus of 330K; Last Week was 315K)

·         Weekly Continuing Claims due out Thursday at 8:30 (Briefing.com consensus of 2.883 M ; Last Week was 2.855 M )

·         February Existing Home Prices due out Thursday at 10:00 (Briefing.com consensus of 4.60 M ; January was 4.62 M )

·         March Philadelphia Fed due out Thursday at 10:00 (Briefing.com consensus of 2.0; February was -6.3)

·         February Leading Indicators due out Thursday at 10:00 (Briefing.com consensus of 0.3%; January was 0.3%.

On other news.... 

Fed releases FOMC statement
Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate, however, remains elevated. Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually, moving toward those the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for the economy and the labor market as nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in April, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $30 billion per month rather than $35 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee's sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee's dual mandate.The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substtantially in a context of price stability. If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.With the unemployment rate nearing 6-1/2 percent, the Committee has updated its forward guidance. 

The change in the Committee's guidance does not indicate any change in the Committee's policy intentions as set forth in its recent statements.Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Richard W. Fisher; Sandra Pianalto; Charles I. Plosser; Jerome H. Powell; Jeremy C. Stein; and Daniel K. Tarullo.Voting against the action was Narayana Kocherlakota, who supported the sixth paragraph, but believed the fifth paragraph weakens the credibility of the Committee's commitment to return inflation to the 2 percent target from below and fosters policy uncertainty that hinders economic activity.

Notable Changes to Fed March 19 Statement

·         March 19- indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions... January 29- indicates that growth in economic activity picked up in recent quarters.

·         March 19- takes out that unemployment rate declined; keeps rates remain elevated language... 

·         March 19- A little more cautious on housing as it says that the housing sector remained slow compared to 'slow somewhat' in January... 

·         March 19- The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions... Jan 19- Taking into account the extent of federal fiscal retrenchment since the inception of its current asset purchase program, the Committee continues to see the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy... 

·         March 19- Another $10 bln taper, as expected and noted in asset purchase amounts (now down to $55 bln a month); continues language with intent on holdings... 

·         March 19- Reiterates 'appropriate' language... 

·         Forward Guidance- Changes it to reflect the turn away from the 6.5% Unemployment threshold... 

·         Voters- Kocherlakota dissented from paragraph 5: "To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored".

Currencies 

Dollar Jumps as FOMC Tapers, Alters Forward Guidance: 10-yr: -25/32..2.755%..USD/JPY: 102.43..EUR/USD: 1.3849

·         The Dollar Index spiked to session highs near 79.80 as traders moved into the greenback in response to the FOMC decision to trim its asset purchase program to $55 bln per month ($65 bln previous) and alter its forward guidance to include a wide range of information (previously unemployment rate of 6.5%). Click here to see a daily Dollar Index chart.

·         The post-decision bid has the Index on track to close at its best level in two weeks as trade probes resistance in the area. 

·         EURUSD is -80 pips @ 1.3850 as trade presses session lows. The recent selling has the single currency testing minor support in the 1.3850 while looking at a two-week closing low.

·         GBPUSD is -30 pips @ 1.6560 as trade has reversed from session highs to session lows following the FOMC decision. Traders are now watching the 50 dma (1.6555), which is the final level of defense before a move into the 1.6400 region. Britain's CBI Industrial Orders Expectations will be released tomorrow. 

·         USDCHF is +65 pips @ .8795 as action climbs off 29-month lows. Buying following the Fed has trade testing the .8775/.8800 resistance level. The Swiss National Bank will opine tomorrow with markets expecting the central bank to hold its Libor Rate steady at less than 0.25%. 

·         USDJPY is +95 pips @ 102.35 as trade readies for its best close in a week. Today's advance has the pair testing the 100 dma 102.39) and the upper bound of the 101.50/102.50 range that has been in place for much of the past two months.

·         AUDUSD is -65 pips @ .9060 as trade presses the lows. The hard currency was testing three-month highs at the 200 dma (.9144), but saw a sharp reversal as the Fed Statement crossed the wires. Of interest will be how action responds to another test of .9050 support. 

·         USDCAD is +90 pips @ 1.1220 as trade busts out to its best levels since July 2009. The pair saw a follow-through bid early on in the session after yesterday's dovish comments from Bank of Canada Governor Stephen Poloz before breaking out to fresh three and a half-year highs after the Fed. Canada's wholesale sales were released this morning, posting a disappointing 0.8% MoM (1.2% MoM expected).

Jason's Commentaries


The market definitely took a huge reversal last night after the FOMC announced another tapering of $10b to $55b purchasing a month. Of the whole press conference, the press heard only 3 words coming out from Yellen's mouth. "6 more months' is likely to the time frame where the FOMC will likely to raise rates. Volumes were terrible last night as the market waited for the FOMC statements.Towards the end of the session, the market managed to take much of its losses as covering occurs. The heaviest hit sector was Utilities and Industrials losing 1.58% and 1.03% respectively. Although it's not as bearish as it seems, I reckon this could be the start of a volatile period as the FOMC continues to taper. We are likely not to have much upside to go.  

Market Call: DOWN

Date: 20 March 2014