Fed May Move in October

	Last	Change	Percent
S&P Futures	1715.4	-2.0	-0.12%
Eurostoxx Index	2927.8	-8.4	-0.28%
Oil (WTI)	105.7	-0.7	-0.64%
LIBOR	0.25	-0.001	-0.24%
US Dollar Index (DXY)	80.46	0.083	0.10%
10 Year Govt Bond Yield	2.75%	0.00%
Current Coupon Ginnie Mae TBA	104.8	-0.2
Current Coupon Fannie Mae TBA	103.8	0.0
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.37

Slow news day. Markets are taking a breather after a tumultuous week. There are no economic data this morning, and bonds / MBS are flat.

Federal Reserve Bank of St. Louis President James Bullard told Bloomberg TV that Wednesday's decision not to slow bond buying was a "close call" and and a "small" tapering is possible next month. Given that there is no press conference scheduled after the Oct Fed meeting and no economic forecasts, this is a bit of a surprise. That said, if the Fed is in fact contemplating moving at the next meeting, then this rally in bonds will probably prove to be very short-lived. LOs, is you have customers on the fence, get 'em locked. 

Wells is out with a bearish call on the S&P 500. Their end of year call on the S&P? 1440, down 16% from here. The thesis:  the market growth has been all multiple expansion and earnings are going to disappoint. Gina Adams is trying to become the next Elaine Gazarelli.

Speaking of earnings, we are now in the "oh crap" season, where companies who are going to miss their quarterly estimates begin to fess up. Earnings season officially starts in 3 weeks with Alcoa on 10/8. Last Wed, Oracle took advantage of the FOMC distractions to announce they were going to miss. 

Warren Buffett called the Fed the "greatest hedge fund in history." It is generating 80 and 90 billion a year in revenue for the US government.  I bet Ben is thinking "hey, can I get 2 and 20?"

Brent Nyitray, CFA

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