Market Reflections 8/12/2009

Markets showed little reaction to today's FOMC statement which hints at an end to quantitative easing, a minus for assets with risk premiums but offset by the prospect that interest rates will remain low for an extended period. The dollar ebbed back and forth before ending slightly lower with the dollar index at 78.82. Gold, which has a pronounced risk premium against inflation, showed nearly no reaction, ending at $946. Stocks held onto opening gains, gains that follow two days of profit taking, with the S&P ending up 1.2 percent to 1,005. Treasuries ended little changed with the 10-year yield at 3.71 percent.