Stock Market Update

[BRIEFING.COM] The major averages have backpedaled a bit in immediate reaction to the October FOMC Statement with the Nasdaq (-0.2%) dipping to a fresh session low while the S&P 500 (+0.1%) remains about ten points above its morning low. With the slight recent movement, the benchmark index remains about 30 points, or 0.39%, above its 50-day moving average (7698) while the Nasdaq is about 150 points, or 0.56%, below the 50-day moving average of its own, which was approached at the open of today's session.

While today's statement did not produce a rate hike, it was worded in a way that seems to be laying the groundwork for an expected rate hike in December. It acknowledged that economic activity is expanding at a strong pace, domestic spending has been resilient, capital investment is robust, and the unemployment rate has changed little. It also reiterated that inflation remains elevated and reminded that the Committee intends to deliver price stability.

Fed Chairman Warsh will surely be quizzed at the upcoming press conference about future intentions of the FOMC, but it would be a surprise if he offered any strong clues pertaining to the December meeting.

Treasuries saw some movement in immediate reaction to the directive, but they are essentially unchanged from levels seen before the release with the 2-yr yield up three basis points at 4.77% and the 10-yr yield up four basis points at 5.04%.