Markets Adjusting to Less Easy Fed

Markets are calibrating to the new world of a less easy Fed.  Traders will be watching for those types of Fed-related moves Friday, amid the activity generated by the quadruple expiration of futures and options, and re-balancing of the S&P 500 and Nasdaq. Facebook will join the S&P on Friday afternoon.

There is also third-quarter GDP on Friday at 8:30 a.m. ET. It is the third look at the number, which has risen to a surprising rate of 3.6 percent. Just several weeks ago it was expected to be 2 percent.

“If it’s revised at all I think it would be marginal,” said Ward McCarthy, chief financial economist at Jefferies. “What matters is we’ve seen progressively faster GDP growth this year—1.1 [first quarter] to 2.5 [second quarter] to 3.6, and right now I’m at 2.7 for the fourth quarter. I’d be very surprised if that’ didn’t figure into the Fed’s thinking.”


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