Friends
We saw stocks do quite an about face today as the Dow for example, which had been down nearly 750 points in early trading, erased all of those losses and ended the day higher. The Nasdaq was the biggest star moving more than 2% higher by the close. Early weakness could be attributed to last night’s debate results and/or a slightly hotter than hoped CPI report (I’ll let you decide). That CPI data might just pave the way for a quarter point Fed Funds rate cut instead of the often mentioned 50 basis point cut. Either way there was nothing in the inflation data to suggest that the Fed won’t begin a rate cut cycle next week.
As for stocks, by the close the Dow Jones Industrial Average was up 124 points to finish the day at 40,861. The S&P 500 was up 58 points to close at 5,554. The Nasdaq Composite Index was up 369 points to close at 17,395. Gold was down $4 to trade at $2,539 per ounce, while oil was up $1.36 to trade at $67.11 per barrel WTI.
Stocks began to recover today at the same time bond yields stopped going down. The market is trying to determine where the Fed is heading (3%-3.5%) with regards to the desired level for Fed Funds and if ultimately, we will return to a normal yield curve. Today’s reversal was impressive. Let’s see if the bulls can keep the momentum for the rest of the week. Stay tuned.
Have a nice evening everyone.
