Negatives Brew Before a Possibly Hawkish Fed By Rev Shark Street.com Contributor 12/12/2006 12:24 PM EST
As we await the Fed interest rate decision, there are quite a few pockets of poor action. The momentum favorites are lagging badly, with GOOG, AAPL, ICE, RIMM, NYX, UAUA and many more all trading down. BBY earnings were poor and guidance lackluster, which is pressuring retailers.
TXN's update was very poor, and if it weren't for one upgrade, it probably would have sunk much further; NUE is hitting the steel sector hard, GS is trading flat after a blowout quarter, and breadth is closing in on 2 to 1 negative.
There is some talk out there that the Fed is likely to be a bit hawkish as a way of shoring up the dollar, which is putting a little pressure on gold.
The problem with a hawkish Fed is that it is likely to pressure the broader market, which has been pricing in the much fabled but rarely seen "soft landing."
We definitely have some negatives brewing today, and I'm not feeling very optimistic that the Fed news is going to help matters.
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