All eyes on the Fed next week for tapering signs
Reuters said investors would be waiting for the comments of officials from The Federal Reserve, including vice chair Janet Yellen's, for signs that the government agency would be scaling back its USD85 billion monthly bond-buying program. Yellen was scheduled to appear on a US Senate hearing regarding her nomination for the head chair of the Fed. Federal Reserve Bank of Atlanta President Dennis Lockhart was also expected to discuss the state's economic outlook on Tuesday.
New York-based Platinum Partners president Uri Landesman said, "There needs to be some sort of catalyst, and that would be the No. 1 catalyst that I think could happen. This is a monster bull market."
Investors had been bracing themselves on the possibility of a stock market shakeup and a significant change on the 24% year-to-date gain of Standard & Poor's 500's .SPX. Reuters said most of the investors were vouching on the possibility that the sign to taper the economic stimulus program would be coming from the Fed itself.
Wells Fargo Private Bank regional chief investment officer Cameron Hinds would be one of those watching. "We will see what happens behind the doors at the Fed, but certainly there will be some reassessment of at least the possibility of a December and/or January tapering," Hinds said.
The news agency conducted a poll on Friday, and results indicated that primary dealers in the US shared the same sentiment that a March tapering would be seen. A poll conducted two weeks ago by Reuters also saw the same results.
However, anxiety over the reduction of the bond purchases by the US reflected in the futures and bonds markets. Reuters obtained data that prices of 10-year benchcmark notes dropped 1-10/32 late Friday. This, in turn, increased yields percentages from 2.60% to 2.75%.
Despite the performances of such securities, the financial markets showed a stronger US economy as a whole, the news agency said.