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Macro View

We will likely see another calm trading session today ahead of a number of market-moving developments on deck for the rest of the week. The most important of these upcoming developments is the Fed announcement on Thursday after the two-day FOMC meeting. Wednesday brings the German Constitutional Court ruling on the constitutionality of the European Stability Mechanism, the EUR500 billion permanent Eurozone bailout fund. The Dutch parliamentary elections on Wednesday are expected to bring a Eurozone-friendly government in power.

The Fed is widely expected to come through with another round of bond purchases on Thursday, even though most serious people doubt the move's relevance to current ground realities. The stock market loves more monetary stimulus and has been pushing higher all summer in anticipation of more Fed support.

But QE3 will do little to improve the nation’s economic fortunes as monetary conditions already remain quite favorable. In fact, the expected launch of Apple’s (AAPL - Analyst Report) iPhone 5 on Wednesday may have more positive impact on consumer spending in the final quarter of this year than anything the Fed could come up with on Thursday. The issues facing the U.S. economy are beyond the Fed’s control, be they domestic fiscal uncertainties or international growth questions.

In corporate news, McDonald’s (MCD - Analyst Report) August same-store sales numbers came in modestly lower than expected, with weakness in the U.S. and Europe getting offset by strength elsewhere.  The fast-food chain’s August comps represented a rebound from July, which was the weakest in nine years. In other news, Casey's General Stores (CASY - Snapshot Report) came out with better-than-expected quarterly results.


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