Friends
Market participants slept on it last night and decided that FOMC statement and Chair Powell’s comments yesterday were dovish enough to stir “don’t fight the fed” sentiments. Remember, the Fed would not embark on a round of interest rate cuts if everything was wonderful. Rate cuts occur to either ward off disaster or respond to actual deteriorating data. But, over the past 10 years, accommodation by central banks has resulted in higher stock prices (see TINA), and the Pavlovian response was evident in today’s trading.
By the close, the Dow Jones Industrial Average was up 249 points to finish the day at 26,753. The S&P climbed to all-time highs up 27 for the day to close at 2,954. Gold continued its surge up $44 to trade at $1,393 per ounce, while oil was up $3.12 to trade at $56.88 per barrel WTI.
The 10 year Treasury note has dropped in yield to 2%, as the bond market continues to tell a rather ominous story. But, stocks stretching to new highs, regardless of the cause/reasons is quite impressive given the numerous unknowns that continue to form a formidable head wind. Let’s see how the week finishes out tomorrow.
Have a nice evening everyone.
