I’ll post the daily Stock Market Report and Stock Market Analysis after the close. Here’s some news…
FED POLICY MAY SHIFT SOONER THAN EXPECTED (Reuters)
“Philadelphia Federal Reserve Bank President Charles
Plosser, the loan dissenter at the Fed's July policy meeting, on Saturday
continued his push for the U.S. central bank to change its language on monetary
policy to reflect an improving economy and pave the way for a
sooner-than-expected interest rate hike.” Story at…http://www.reuters.com/article/2014/09/06/us-usa-fed-plosser-idUSKBN0H10F520140906?feedType=RSS&feedName=businessNews
FED ECONOMISTS SEE FED POLICY RISKS (Bloomberg)
“Monetary policy accommodation to help the economy may
backfire by creating conditions that could undermine financial stability and
cause sharp downturns, according to a report by
two top Federal Reserve researchers. Central banks “should consider effects on both financial
conditions and financial stability when setting monetary policy,” according to
a preliminary paper by…the Fed’s Office of Financial Stability Policy and
Research in Washington.” Story at… http://www.bloomberg.com/news/2014-09-05/fed-economists-see-financial-stability-risk-from-low-rate.html
TIME TO TAKE SOME RISK OFF THE TABLE - GARTMAN (CNBC)
“The weak momentum seen in equity markets is starting to
trouble Dennis Gartman, the editor and publisher of the ‘The Gartman Letter,’
who believes that it might be the right time to take some risk off the
table.” Story at…http://www.cnbc.com/id/101973990
THIS WILL CAUSE TROUBLE: NEW BANKING RULES TIGHTEN
“LIQUIDITY” (ABC News)
“Federal regulators are requiring big banks to keep
enough high-quality assets on hand to survive during a severe downturn, the
latest move under congressional mandate to lessen the likelihood of another
financial meltdown. The Federal Reserve adopted rules on a 5-0 vote Wednesday
that will subject big U.S. banks for the first time to so-called
"liquidity" requirements. Liquidity is the ability to access cash
quickly. The Federal Deposit Insurance Corp. and the Treasury Department's
Office of the Comptroller of the Currency adopted the rules later in the
day…The liquidity rules for banks will begin to take effect in January, and the
requirements will be phased in over two years.” Story at…
http://abcnews.go.com/Business/wireStory/banks-required-hold-liquid-assets-25228216Essentially, this regulation increases reserve requirements for the banks. Norman Fosbeck noted in his book, “Stock Market Logic,” that changes in reserve requirements for the nation’s city banks by the Federal Reserve are the single most important indicator in stock market analysis. It has been suggested by some market experts that the bull market began in earnest when the Fed abandoned “mark-to-market” rules on bank assets during the housing debacle. This effectively decreased bank reserve requirements because large amounts of negative assets disappeared from their books. Conversely, increases in reserves are uniformly bearish, but it could be more than a year before this regulation affects the stock market; or possibly as soon as January.
