The BIG story of the week was the FOMC meeting on Tuesday...and the market's disappointment in 'only' 25 bps cuts on the Fed and discount rates. The Fed then surprised investors the next morning, in a coordinated plan with other global central banks, by injecting up to $40 billion in reserves into the financial markets in order to improve liquidity.
November PPI came in higher at 3.2% versus 1.5% (core at 0.4% versus 0.2%) on Thursday, and November CPI at 0.8% versus 0.6% (core at 0.3% versus 0.2%) on Friday. A better than expected Advanced Retail Sales (1.2% versus 0.6% expected in November) failed to impress investors, especially as reports that online sales for November and December are running below the 26% pace of a year earlier.
The major indices finished the week lower:
Dow Jones -2.10%
S&P500 -2.44%
Nasdaq -2.60%
Russell 2000 -4.02%
The US Dollar rallied 1.5% as investors pared down expectations for further rate cuts on the back of the biggest increase in consumer expectations in two years. Gold finished the week at $798, down $2.20.
Check out next week's calendar at:
http://www.bloomberg.com/markets/ecalendar/index.html
Amaury
Contributing Author, ETF Updater
http://etfupdater.com/
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