Focus Moves Toward the Fed - Analyst Blog
January 25 2012 - 4:32AM
Zacks
The focus today will be on the Fed, as the Central Bank unveils
a new measure as part of its ongoing efforts to improve
communication with the markets. The prospect of an even longer
timeframe for lower interest rates, as many in the markets are
hoping to come out of today’s Fed releases, has the potential to
pull stocks out of the slumber of the last two trading
sessions.
A mixed earnings season thus far and the reemergence of Greece
worries have prompted stocks to take a pause lately. It will be
interesting to see if Apple’s (AAPL) blockbuster
results after the close yesterday will have any resonance beyond
its own stock price.
In this morning’s key earnings releases, Boeing
(BA) came out ahead of expectations on both the bottom- and
top-lines, but the company’s full-year 2012 earnings guidance came
in below current expectations. Automatic Data
Processing (ADP), the payroll processor, handily beat EPS
expectations on in-line revenue. United
Technologies (UTX) beat on EPS, but missed revenue
expectations. Dover (DOV) and Abbott
Labs (ABT) beat on earnings, but modestly missed revenue
expectations.
???
At the conclusion of its first meeting of 2012, the Fed will be
releasing the Fed Funds rate forecasts by the individual Fed
districts through 2015. This will be in addition to the customary
FOMC statement after the meeting and the quarterly Bernanke news
conference. We will also get when the individual Fed districts see
the FOMC starting to raise interest rates again.
???
This is a significant development as it likely will show that
the Central Bank districts expect near-zero interests for longer
than the current FOMC policy of through mid-2013 only. It will be
interesting to see how Treasury yields will respond to this
expected disclosure. Will this result in greater flattening of the
yield curve, particularly given growing expectations of another
round of quantitative easing despite the recent favorable run of
economic reports?
APPLE INC (AAPL): Free Stock Analysis Report
ABBOTT LABS (ABT): Free Stock Analysis Report
AUTOMATIC DATA (ADP): Free Stock Analysis Report
BOEING CO (BA): Free Stock Analysis Report
DOVER CORP (DOV): Free Stock Analysis Report
UTD TECHS CORP (UTX): Free Stock Analysis Report
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