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August 21: Awaiting Fed Minutes

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As we continue to savor every morsel of Retail industry earnings results and projections about the Fed's annual conference in Jackson Hole, WY beginning today, investors must remain aware that the tumbleweeds are starting to blow across the landscape, and we'd all do well to understand that one piece of economic news -- whether good or bad -- is in jeopardy of gathering too much immediate currency.

What I mean is this: though we expect to hear something about QE tapering and thus rising interest rates over the next couple days, which may continue some volatility on the 10-year and elsewhere, it's important to keep in mind these pieces of information would not be intellectually fondled as extensively if we were in the middle of earnings season or some other macro-event, which we are not. Thus, brace for any immediate impact to news from Jackson Hole, and take it with a grain of salt.

…That is, as long as the news is within relative expectations, of course. Until new policy is brought down from on high, we won't be sure QE will still exist in any form; it's still possible we'll be done with $85B in monthly asset purchases which have kept liquidity in the market. If this happens, we'll all be taking the bucket to a dry well, and will need to figure out another solution for economic growth. Not that this is the most likely scenario, but it cannot be completely overlooked at this point.

Retailers continue to report earnings this week (thank goodness -- they're the only thing keeping me from writing the rest of this column like a filibuster on the floor of Congress), and results are still moderately positive overall: Target (TGT - Free Report) beat, where Staples missed and lowered guidance; JM Smucker (SJM - Free Report) topped on both top and bottom lines, and Lowe's (LOW - Free Report) showed increases in both sales and earnings.

Otherwise, let's look for something interesting to come out of the Fed conference -- God, please! something! -- today and tomorrow. And if anything else happens between now and tomorrow morning, be certain I'll grasp onto it tightly.

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