Futures Rise Awaiting Yellen Testimony

image provided by Mint.com
image provided by Mint.com

WSJ.com Article

U.S. stock futures rose, bouncing after the previous session’s broad losses, as investors awaited Federal Reserve Chairwoman Janet Yellen’s testimony to Congress.

In an otherwise quiet week for economic-data releases, investors will be tuned in to Ms. Yellen’s testimony to Congress, which begins at 10 a.m. EDT. They will focus on the question-and-answer period for any signs that the Fed may be changing its exit strategy from its low interest rate policy following a strong April jobs report.

“Ms. Yellen is a focus for today, but I don’t expect any surprises from her,” said Gail Dudack, chief investment strategist at Dudack Research Group, a division of brokerage firm Wellington Shields & Co. “To a large extent, she’s been a steady hand.”

My opinion: I think the comment by Dudack is accurate.  Yellen has displayed a very steady course since being handed over the chair job in early February.  After promising job numbers just a week, I would expect Yellen to laud the private sector; while at the same time announcing a cautious and  continued pace of the taper.

I believe the Fed has been trying to portray confidence in the market with their continued taper.  Knowing the Fed had preliminary job numbers before the announcement, I think that now any deviance from a continued taper would project disappointing market numbers to follow.

At this point, as long as the numbers don’t plummet I would expect the taper to continue as we watch the economy start to ride along without the training wheels of QE.

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