CNBC
By: Patti Domm
Stocks could stay in low gear in the week ahead, as traders look for clarity on the Federal Reserve's policy, the housing recovery and especially — the consumer.
Merger activity could also be a factor as reports of talks between two retailers carry last week's merger boomlet into this week. The Wall Street Journal reports that Office Depot and Office Maxare in discussions to merge.
Homebuilder sentiment Tuesday, housing starts Wednesday and existing-home sales Thursday could provide a good look at how the housing market is faring. The Fed also releases minutes of its last meeting Wednesday, and there is much interest in what officials will say about their extraordinary easing policies.
At the December meeting, several Fed members said they wanted to stop quantitative easing by the end of this year but the Fed is still expected to continue the program into next year. The Fed is currently buying $85 billion in Treasurys and mortgage-backed securities monthly, under the program. But since the December meeting minutes were released in January, Treasury rates have risen and the 10-year note yield has moved to a higher range around 2 percent.
"I can't imagine that conversation got any less pertinent since December, given the fact we avoided the 'fiscal cliff' and the economic numbers got better," said Deutsche Bank chief U.S. economist Joseph LaVorgna. The makeup of the Fed changed in January, with new voting members, but it is still not expected to take on a more hawkish tone. <Click Here for More>
Merger activity could also be a factor as reports of talks between two retailers carry last week's merger boomlet into this week. The Wall Street Journal reports that Office Depot and Office Maxare in discussions to merge.
Homebuilder sentiment Tuesday, housing starts Wednesday and existing-home sales Thursday could provide a good look at how the housing market is faring. The Fed also releases minutes of its last meeting Wednesday, and there is much interest in what officials will say about their extraordinary easing policies.
At the December meeting, several Fed members said they wanted to stop quantitative easing by the end of this year but the Fed is still expected to continue the program into next year. The Fed is currently buying $85 billion in Treasurys and mortgage-backed securities monthly, under the program. But since the December meeting minutes were released in January, Treasury rates have risen and the 10-year note yield has moved to a higher range around 2 percent.
"I can't imagine that conversation got any less pertinent since December, given the fact we avoided the 'fiscal cliff' and the economic numbers got better," said Deutsche Bank chief U.S. economist Joseph LaVorgna. The makeup of the Fed changed in January, with new voting members, but it is still not expected to take on a more hawkish tone. <Click Here for More>
