U.S. Stock index futures pointed to a day of positive and optimistic trading – though with the volatility of election day results, there's still plenty of room for error. Perhaps more importantly, a general consensus among bankers has been reached about the size of the quantitative easing package, which is now estimated to come in at around $500 billion.
Dow Jones Industrial Average index futures were up 53 points to 11,143, while S&P 500 index futures rose 6.7 points to 1,189.8 at 8:58 a.m. EST.
Nasdaq 100 index futures gained 11 points to 2,140.
The presidents of several regional federal reserve banks – notably James Bullard of the St. Louis Fed and Dennis Lockhart of the Atlanta Fed – suggested that the Fed might begin with a purchase of $100 billion in the next month and adjust the pace in subsequent months as the economy develops. Some investors are expecting the central bank to purchase mortgage-backed securities in addition to or instead of Treasury notes, as well.
The Fed begins its meeting today, and voters will go to the polls to deliver what most pundits believe will be a negative review of President Barack Obama's first two years at the helm of the ailing U.S. economy. Jobs and the lack thereof, more than any concerns about war, the environment or healthcare, dominate the minds of the American public right now.
In the past, election-day trading has hinged on the results at the polls. But with Congress already mostly stalled and likely to become completely deadlocked, all eyes are on Bernanke.
"[The Fed] really can't afford to mislead the market. Chairman Ben S. Bernanke himself has been forthright in indicating that he thinks quantitative easing will be required," Mike Lenhoff, the chief strategist at Brewin Dolphin Securities in London, told Bloomberg News.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
