By Nicholas Santiago on August 9th, 2010 9:45am Eastern Time
Tomorrow the Federal Reserve Bank is expected to make an announcement on the condition of the economy and the fed funds rate (overnight lending rate to the large major banks). Often many traders and investors will trade very lightly until that decision is made by the Federal Reserve Bank. At this time there is not much expectation of a change in the fed funds rate which is currently zero – quarter percent. This major overnight bank lending rate has been at this historic low since December 2008.
This morning the S&P 500 e-mini futures contract (ES U0) are trading higher by 4.00 to $1123.50. Generally, Monday's are a much lighter volume trading day and often a positive one at that. Therefore, today the major stock market indexes could just float sideways to higher for most of the day. The bulk of the action could come in the first two hours of the trading day.
Some leading stocks that are trading higher this morning are Freeport McMoran Copper & Gold (NYSE:FCX), McDonalds Corp (NYSE:MCD), International Business Machines Corp (NYSE:IBM), Baidu Inc (NYSE:BIDU). Should the market indexes catch a bid higher these stocks could run higher as they are starting the session strong. However, it is important to remember that the major indexes are going to likely be on pause after the first couple of hours and the rest of the day could be sideways.
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