Daily Market Update 12/19/13

Rates moved higher Thursday following yesterday’s decision by the Fed to begin tapering its bond purchases.  The Federal Reserve announced Wednesday that it would scale back its quantitative easing program by $10 billion per month to $75 billion beginning in January.  Fed officials expect to continue reducing the pace of bond purchases based on the performance of the economy, but do not anticipate raising interest rates until the Unemployment Rate is “well past” the 6.5% level.  In other news, weekly Jobless Claims rose to 379,000, well above forecast.  This is the second straight week of elevated readings.  Existing Home Sales declined to 4.9 million annual units, below expectations, to the lowest level since December 2012.  The Philly Fed Index, a survey of manufacturing activity in the Philadelphia region, came in at 7.0.  Readings above zero indicate expansion in the manufacturing sector.  Leading Indicators rose 0.8%, a bit higher than expected.  Results from today’s 7-year Treasury auction will be released at 1:00 PM.

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