The stock markets in the United States declined today after the minutes of the meeting of the Federal Open Markets Committee (FOMC) indicated a concern over deflation.
The S&P 500 and the Dow Jones slightly declined today. The NASDAQ dropped 0.57% while the Russell 2000 fell 0.94%.
The minutes showed that the members of the FOMC discussed the need to monitor the declining inflation expectations given the possibility that the prices in the United States are not increasing fast enough.
“Many participants observed the committee should remain attentive to evidence of a possible downward shift in longer-term inflation expectations. Some of them noted that if such an outcome occurred, it would be even more worrisome if growth faltered,” according to the minutes of the meeting of the FOMC.
In a telephone interview with Bloomberg, Michael Block, chief equity strategist at Rhino Trading Partners LLC said, ‘The Fed is admitting they have no idea where inflation is going long term. While I admire their candor, this doesn’t make me want to own stocks this afternoon.”
Last month, the Federal Reserve focused on the improvements of the labor market and announced the end of the bond-buying program. The policy makers also indicated that the risk of inflation remained persistently below their target.
The FOMC also noted a slow improvement in the housing market conditions. According to policy makers, the starts and permits of single-family homes were little changed in recent months. The sales of new homes were flat in September.
The FOMC said participants in foreign financial markets became more concerned regarding the prospects for global economic growth.
- Dow Jones Industrial Average (DJIA) – 17,685.73 (-0.01%)
- S&P 500- 2,048.72 (-0.15%)
- NASDAQ- 4,675.71 (-0.57%)
- Russell 2000- 1,159.33 (-0.94%)
- EURO STOXX 50 Price EUR- 3,123.12 (+0.09%)
- FTSE 100 Index- 6,686.60 (-0.19%)
- Deutsche Borse AG German Stock Index DAX- 9,472.80 (+0.17%)
- Nikkei 225- 17,288.75 (-0.32%)
- Hong Kong Hang Seng Index- 23.373.31 (-0.66%)
- Shanghai Shenzhen CSI 300 Index- 2,537.22 (-0.16%)
Stocks in Focus
The stock price of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) declined more than 5% to $10.19 per share after Morgan Stanley analyst James Faucette downgraded his stock rating to Underweight with a price target of $7 per share.
The shares of TransCanada Corporation (USA) (NYSE:TRP) (TSE:TRP) increased more than 2% to $50.68 per share after the company delayed its plans for the Keystone XL pipeline to increase its dividend growth rate of at least 8% until 2017. The company anticipated $13 billion of small to medium sized projects to be in service by the end of 2017.
JetBlue Airways Corporation (NASDAQ:JBLU) gained more than 4% to $13.24 per share after the company announced its long-term plan to drive shareholder returns including charging for checked bag for certain customers and increasing the seats on its Airbus A320 fleet.