For the time, it appears that the major equity indices have moved past their fears of global economic worries and Federal Reserve comments. Going into the afternoon session, all three indices have pulled back from original highs, but the Dow Jones Industrial Average managed to reach another new all-time intraday high. The consumer price index (CPI) reading for the month of August points to more buying power for the American consumer as the decline in oil prices has led to similar declines in the prices of goods and services, while wages have increased. Therefore, the consumer’s dollar was stretched farther than any other time this year. Elsewhere in the world, the Scottish Independence Referendum (which will be voted upon tomorrow) is literally a coin toss as this point. While this may cause concerns for some minority nationalities across Europe, the UK is continuing to chug along with unemployment figures beating analyst expectations, and the rate dropped to 6.2% in July which is the lowest rate since 2008. As we hinted towards yesterday, the People’s Bank of China is reportedly injecting 500 billion yuan ($81.35 billion) into the country’s banking system in a move design to jump-start their slowing economy. However since the bank is notorious for its blatant lack of transparency, there is no official public release on this action. Lastly, the latest meeting of Federal Reserve policymakers concludes today, with a press conference at 2:30PM where investors will be paying attention as to when the tapering of quantitative easing (QE) will end and the raising of interest rates will begin.

This morning, the National Association of Home Builders (NAHB)’s Housing Market Index was far more encouraging that many anticipated. The rising traffic component led to a very strong headline reading for the month of September at 59, much higher than August’s strong reading of 55, and the highest level since November 2005. The traffic component, which had been lagging badly in recent months, is up 5 points to 47 (readings above 50 indicate monthly growth). The present sales component is also higher at 63, which points directly to a gain in new home sales during September. We note that the sizable gain in the traffic component marks an important moment for housing data. Traffic in housing has not been able to grow much in recent years due to a lack of first-time buyers who, perhaps bolstered by rising job prospects and a more optimistic outlook on the future, now may be coming back to the market.

However, new home sales and housing starts (different measurements from different agencies) have yet to show the same kind of general strength as the housing market index has the last several months. We will see if these numbers are the real deal as the number of housing starts in August will be released tomorrow.

In the meantime, we are awaiting comments from Janet Yellen. Odds are that the doves will rule in the Fed again this month, but the market is still nervous in advance.