Strong industrial output from China along with a decent report on U.S. manufacturing combined to lend an assist early on, but with the elections, the Fed announcement and the unemployment numbers lurking overhead, the starch was quickly taken out of this rally.
The dollar headed higher with the guessing game continuing as to how much or how little of an impact the Fed will be making on Wednesday morning. The current bet is that a $500 billion stimulus package is in the works, but great controversy over this upcoming move prevails.
It’s a very delicate situation for the Fed. If the package to be announced is too small, it may not have much of an impact. If it’s too large, that would suggest the economy is actually weaker than had been assumed.
Talk about being between a rock and hard place.