Looking ahead to the next FOMC meeting on Oct. 29 and 30, Credit Suisse economist Neil Soss believes the next policy statement from the committee may "look a lot like the last one." In note to clients that was published before the disappointing September employment growth numbers were available, Soss wrote, "It will take weeks to learn what, if any, effects the fiscal showdown have had on real economic activity. Moreover, the quality of US economic data for October to be released in November and beyond may be compromised."
The FOMC has a strong preference not to alter policy in the absence of clear data.
Soss added that Credit Suisse's "baseline" for Federal Reserve policy is for a modest tapering of monthly securities purchases of $10 billion in January, "followed by cutbacks of growing intensity through September 2014, when we have penciled in the program's conclusion. If this scenario holds, QE3 would total just over $1.65
The KBW Bank Index was down 0.4% to 65.17, however, all but eight of the 24 index components ending with gains. The winner on Tuesday among major U.S. banks was BB&T (BBT) of Winston-Salem, N.C., with shares rising 2% to close at $34.75.In addition to Zions and Regions Financial, investors were displeased with the third-quarter results of State Street (STT) of Boston, sending the trust and custody bank's shares down over 3% to close at $67.62. State Street early on Tuesday reported third-quarter earnings of $531 million, or $1.17 a share, which missed by a penny the consensus estimate among analysts polled by Thomson Reuters. The company's total revenue was up year-over-year, however, State Street saw significant declines in trading services revenue and securities finance revenue. On a brighter note, assets under custody and management continued to grow. Please see TheStreet's earnings coverage for more on State Street's results.
Email. Follow @PhilipvanDoorn
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV