The market dynamics have become more complicated this morning. In what appears to have been an orchestrated message, two Fed speakers this morning both said that they see additional risks to the economy however, they feel that the current Fed Funds rate is ok where it is. In other words, they are talking down the chances that the FOMC will issue any more rate cuts in the near future. While Lisa and I agree that a rate cut would do little to save the economy the problem is that the market has been anticipating additional rate cuts. The Fed Funds Futures, the measure of chances of another rate cut have been up at extreme levels which essentially put the odds of another rate cut as almost a sure thing as far as the market participants are concerned.

Then we just now received the data of Foreign purchases of US assets. The number came in much lower than had been expected. It was expected that foreign purchases would amount to $71.5 Billion, the number that came in was only $26.4 Billion. This means that foreign governments continue to have a less favorable outlook on the US economy.

Federal Express (FDX) has lowered forward guidance. Futures have pulled back some on this recent economic news but remain in positive territory. Reminder, today is options expiration day so added volatility can be expected.