Zombies Of The Fed Part 543 At Your Local Financial Theater Now

It’s already time to focus again on the possibilities surrounding a Fed interest-rate hike. Yes, it’s like a zombie. Cut it, burn it, run away from it, bury it… it keeps showing up. (Maybe that’s more like your aunt and uncle from Toledo, but you get the idea.)

The reason we say focus again is that first-quarter GDP data has been revised to reflect growth that was not as slow as previously recorded.

GDP fell at a 0.2% annualized rate in the quarter instead of the 0.7% contraction data reported last month. Consumer spending growth was revised up to 2.1% from the initial 1.8%.

This "will bode well for the 2015 [GDP] average and suggests Q2 was entered with better momentum than originally assumed," said Omer Esiner, chief market analyst of Commonwealth Foreign Exchange in Washington.

Of course, the Fed will look closely at these numbers and will be strongly influenced by what goes on in the second quarter that is now coming to a close. If it looks like there is a significant uptick in GDP growth, September as a lift off target date will again come onto our radar.

In spite of the revisions, the euro gained ground on the dollar today, helping to mitigate a downside atmosphere loose in regular trading of gold.

Concerns yet once more about Greece worked against American equities and the two mainland stock exchanges in Europe. Only Britain’s FTSE managed a bit of an up move.

Greece presented a new revenue-raising (tax) plan that is meant to reassure other euro zone countries of the country’s ability to meet its obligations. As of this afternoon in Europe, the plan had not been fully approved, or fully rejected. The sparring goes on unabated.

The Greeks simply won’t reform their pension programs, which are considered overly generous and beyond the means of the economically weak nation.

IMF chief Christine Lagarde spelled out her objections to French magazine Challenge today: “You can’t build a program just on the promise of improved tax collection, as we have heard for the past five years with very little result.”

Talks have not broken down but the danger signs are mounting.

The twin scourges of the threat of a Fed rate hike and the unsettled Greek debt situation pushed bond yields lower today.

Crude oil slipped today. West Texas Intermediate and Brent North Sea were down 1.4% and 1.7%, respectively. U.S. stocks were drawn down but stocks of gasoline and other oil-derived products were up, creating a push-pull scenario that may be present in the market till summer driving season in the northern hemisphere comes to close.

We’ve been touching on the S&P 500 recently and continue to do so. We’re awaiting a bigger move up from it. Perhaps a very big move. Right now, many traders and investors are standing by as they watch the Fed and Greek dramas unfold a little more. The S&P couldn’t seem to break through its recent record high because of the absence of that little bit of extra demand on the trading floor.

When that temporal resistance to the up move is cleared away, we’ll see the S&P jump higher.

Wishing you as always, good trading,