FOMC main focus of another difficult week

THE Tuesday and Wednesday Federal Open Market Committee (FOMC) meeting will probably dominate most market-related headlines in the early part of the week, especially since - unlike some of the others - this meeting is followed by a presentation on the health of the US economy and a press conference.

Even though movements in Wall Street have tended to have minimal impact here, it's probably worth noting that markets will be hanging on every word uttered by Fed chair Janet Yellen for clues as to when interest rates may be raised. This is because there is no clear consensus on whether or not the extraordinary monetary actions undertaken by the Fed since 2008's sub-prime crisis has actually enabled a lasting economic recovery.

Meanwhile, it's interesting to see that when the Dow Jones Industrial Average fell below 18,000 on Friday, all 30 of its components ended weaker. Equally interesting is that according to a survey by the American Association of Individual Investors, only 27 per cent of small investors considered themselves bullish as of mid-May.