Tapering Expected to Continue

Tapering Expected to Continue Updated: 1/29/2014

It is expected that the Fed will reduce its bond buying from the current $75B per month to $65B at today’s meeting, the last for outgoing Chairman Ben Bernanke. In anticipation of this announcement, we’ve seen global equity markets drop over 3% this week as investors also reacted to some disappointing earnings forecasts and global pressure on emerging markets.

“Equity markets have dropped amid disappointing earnings outlooks and emerging markets worries,” said David Krein, Managing Director of NASDAQ OMX Global Indexes. “The Fed is widely expected to reduce its bond buying program to $65B per month at today’s meeting, and investors have likely prepared for this scenario.”

 

INDEX MOVES THIS WEEK

  • NASDAQ BIOTECHNOLOGY INDEX (NBI) is up 0.89% since Friday’s close. Year-to-date performance for the index is up a hefty 7.5% on the heels of the Index’s best year in the past decade.
  • PHLX OIL SERVICE SECTOR INDEX (OSX) was down -0.70% as of noon on Wednesday from the most recent Friday close. The price of crude oil was flat from last week at $97.08 per barrel.
  • PHLX HOUSING SECTOR INDEX (HGX) is up 2.58% with the expectation of interest rates remaining low until after Fed Chairman’s Ben Bernanke’s departure.

INDEX TO WATCH

  • Facebook and a handful of other social media companies are expected to report on earnings in the next week. Look for activity in the space by tracking the NASDAQ INTERNET INDEX (QNET), which is up 48% year-over-year.

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