Daily Market Color January 25, 2016Stocks and Oil Resume Declines After Two-Day Rally The two-day rally in stocks ran out of steam while Treasuries richened marginally across the curve after pressure on oil prices resumed. After surging over 20% in the past two days, WTI and Brent crude fell 4% and 3.5% respectively, off the back of record output from Iraq. The losses came despite news that OPEC was considering holding an extraordinary meeting to discuss the global supply glut at the request of Venezuela. Venezuela’s economy depends heavily on oil income and they lack the capacity to make up for revenue declines by pumping more when prices are depressed. Meanwhile, OPEC officials including Secretary-General Abdullah al-Badri and Qatar’s Energy Minister Mohammed al-Sada said the oil market is starting to see signs that supply/demand fundamentals are stabilizing, which indicates they are not likely to support cutting supply. There were no significant data releases today in the US, but housing data is on tap for tomorrow in addition to the January FOMC meeting. This is the first meeting of Fed policymakers since raising interest rates for the first time in 10 years back in December. Since the last meeting, oil prices have plummeted and market concerns stemming from China have wiped out trillions of stock market value. As such, the markets ascribe a 0% probability of a rate increase announcement. Regardless, investors will analyze the FOMC statement to see if recent market volatility has caused the Fed to change its outlook, which has most recently called for as many as four rate increases through 2016. Fed officials indicated the meeting to be held in D.C. will go forward as scheduled despite ongoing snow cleanup from this weekend’s storm.