Friends
Ok, I’m not buying it. Today’s FOMC statement stated that at this time the Fed wasn’t going to raise interest rates (that was no surprise), but they might be on board for lift off in December (yeah, sure). That’s right, today’s statement certainly seemed more “hawkish” than September’s, but like I said, I’m not buying it. Remember, the September statement had concerns about the global situation, but today’s statement de-emphasized that concern (but they are monitoring the situation). Basically, the FOMC realized that they appeared way too dovish in September, so now they’re pretending to be hawkish. Nope, I’m not buying it. They had it sitting on a tee for them in September and they chickened out. Wake me up when they actually raise rates. Until then, it’s all just lip service.
As for stocks, an early rally gave way to confusion when the statement was released at 1:00 our time, but the bulls regrouped and sent the market averages higher by the close. For the day, the Dow Jones Industrial Average was up 198 points to close at 17,779. The S&P 500 was up 24 points to finish the day at 2090. Gold was down $9 to trade at $1156 per ounce, while oil was up $2.71 to trade at $45.93 per barrel WTI. Bonds did sell off some on the “hawkish” statement and of course the dollar rallied.
Bank stocks rallied on the hopes of a rate hike, and the markets largest cap stock Apple moved up nicely on a good earnings report. We get, what is expected to be a weak GDP report tomorrow. Today’s stock reaction may signal that, indeed, the Fed could have moved last month as market participants were ready for higher rates, or maybe they simply don’t believe the Fed at this point and don’t think they will ever raise rates in our lifetime. Feel free to choose whichever reason fits your agenda. Regardless-a good day for stocks.
Have a nice evening everyone.
