It's official: the holiday season is here, marking the beginning of the race to the end of the year. It's also time for another FOMC interest rate decision, as well as for another look at the employment situation, perhaps the most dreaded measure of the economic recovery in the U.S. This week will bring the Challenger job cut announcements for October on Wednesday, initial jobless claims for last week and the Monster Employment Index for October on Thursday, and the employment numbers for October on Friday.

The earnings season rolls on this week as well, and analysts surveyed by Thomson Reuters are expecting good showings from the reports of Boston Beer Company Inc. (NYSE: SAM), DirecTV Group Inc. (NASDAQ: DTV), Sara Lee Corp. (NYSE: SLE), Starbucks Corp. (NASDAQ: SBUX), and Whole Foods Market Inc. (NASDAQ: WFMI).

The market seems to want to go up each day as it has relentlessly almost every trading session since April. But yesterday, it had a tiny setback after the FOMC announcement. Today the culprit was housing. The National Association of Realtors said existing home sales declined 2.7% in August. Every economist worth his salt said the number would rise.

Good news on the unemployment front did give the market an early boost this morning. Within an hour, though, bad news on the housing sales front wiped out the gains and moved the major indices into negative territory, where they have remained.

Here were today's unofficial closing numbers:

Dow 9,706.99 -41.56 (-0.43%)
S&P 500 1,050.78 -10.09 (-0.95%)
Nasdaq 2,107.61 -23.81 (-1.12%)

The Federal Reserve Open Market Committee (FOMC) issued its statement today making its best attempt to be a non-event. The language on interest rates and quantitative easing remained largely unchanged, and the decision was unanimous.

This decision was designed to avoid any potential landmines which could disrupt the financial markets. The FOMC wanted this statement to be a non-event and seems to have largely succeeded.

Much of the focus this week will no doubt be on the FOMC meeting on interest rates and the subsequent decision, as well as on the G-20 meeting in Pittsburgh, were the agenda will include bonuses for bank executives among other things.

Things will be fairly quiet again on the earnings front as the next earnings season has yet to ramp up. However, analysts surveyed by Thomson Reuters do have high hopes for a handful of companies that will release results this week.

Investors and analysts may be wondering whether the market rally is really over, and whether this signals more trouble ahead for the economy. Well, the Federal Reserve is scheduled to release its next Beige Book report of economic conditions on Wednesday, offering a glimpse of where things stand. The Beige Book report in July suggested that, in some of the 12 Fed districts, the economy appeared to be stabilizing, suggesting that the recession may have reached its bottom, but offering little sign of a recovery. Retail activity remained weak and employment numbers were not good. Yet the minutes of the FOMC August meeting seemed a bit more optimistic about the economy.

In addition to the Beige Book report, the TIPP Economic Optimism Index is scheduled to be released Tuesday, and the University of Michigan Consumer Sentiment Index comes out Friday. So by the end of the week, we could have a good gauge of the mood about the U.S. economy.

The Federal Reserve's Federal Open Market Committee minutes reveal that the Fed is going on a buying spree. The Fed plans to buy $1.25 trillion of agency mortgage backed securities, $200 billion of agency debt by the end of the year, and $300 billion of Treasury securities.

One can only guess from these numbers that the Fed is extremely worried about the financial sector and is still trying to prop up the banks by buying their junk securities to get them off the hook.

The Federal Reserve Open Market Committee (FOMC) issued its unanimous decision. The language on interest rates and quantitative easing remained unchanged. It indicated that inflation is not a problem despite a recent rise in oil prices and sees economic stabilization although continued weakness.

This decision was designed to avoid potential landmines which could disrupt the financial markets. In other words, the FOMC wanted this statement to be a non-event and seems to have largely succeeded.

There are all kinds of mixed signals coming in on the housing market. The good news is that home resales rose 2.9% in April to an annual rate of 4.68 million units. The Federal Open Market Committee said that the market "might be approaching a trough." The bad news is that housing inventory keeps rising. Last month it was rose by 8.8% with 3.97 million existing homes for sale, amounting to a 10.2 months supply.

The Federal Reserve Open Market Committee (FOMC) issued its decision on interest rates. The market anxiously awaited the decision to determine if there would be any surprises like the previous decision in which the Fed announced a massive quantitative easing program.

This decision was quite different and can be summed up in two words: no change. There was virtually no change from the previous statement aside from an acknowledgment of recent economic news. In other words, it turned out to be a non-event.

There is an old saying: "never fight the Fed." If you had been short this bond market, you probably could be wiped out in one afternoon. When the Federal Reserve made its announcement a short time ago that they were buying long term securities the futures on the long bond jumped 4.25 basis points, or more that $4000.00 on just one contract. If you were long say 10 contracts you would be sitting on a $40,000 profit this afternoon.

The Federal Reserve has began its two-day policy meeting today. Chairman Ben Bernanke wants to spend more taxpayer money to purchase more mortgage and other securities. The Fed already has a $600 billion program in place, but apparently that is not enough.

Bernanke claims that his balance sheet is shrinking. He said it dropped 17% from its peak in December from $2.31 trillion down to $1.90 trillion. Bernanke's theory is that if you increase the balance sheet (add more money) the economy will pick up faster.

Bernanke pointed to "trouble in river city" (from Music Man):