Fed Meeting Concludes Today

Equities were mixed. Industrial and material shares fell while technology advanced. The catalyst for the decline was a lower than anticipated reading for a US manufacturing gauge. The ISM Manufacturing Index fell to a nine-month low, perhaps the result of delays in delivering product. A measure of order backlogs was the highest in almost 14 years and delivery times lengthened to match the second longest since March 2010. The prices paid component rose to the highest since April 2011.

In my view, the above is a text book example of “demand pull inflation” defined as potential bottlenecks that are creating delivery delays and higher prices.

This data generally supports the theme that rising input costs may impact margins which may challenge valuations unless costs are passed onto the end user or greater efficiencies are found. Unfortunately, profit margins are at or near record levels and any increase in input costs may have an outsized effect.

Friday, the all-inclusive employment data is released. Will this data suggest wage inflation is accelerating? If so, how will it be interpreted? Some will make a bullish argument, while others bearish.

What will happen today? Will the outcome of today’s Fed meeting impact trading?

Last night the foreign markets were mixed. London was up 0.36%, Paris was up 0.14% and Frankfurt was up 1.15%. China was down 0.07%, Japan was down 0.16% and Hang Sang was down 0.27%.