Friends
As expected, the Fed kept the Fed Funds rate unchanged, but it was not a unanimous vote as there were 2 Fed officials who voted for a quarter point rate cut. The markets still are betting that there is a likelihood of 2 cuts this year, one in September and one in December, but the Fed Chair was totally non-committal in this afternoon’s press conference. Stocks did not like that, and the market averages dropped during the press conference. Before the open we got a better than expected first read on 2nd quarter GDP. Analysts had expected about a 2.5% gain in GDP, but the number came in at 3%. Combined with the first quarter’s negative print, growth in the first half of 2025 sits at 1.2%. The Fed’s dilemma is that inflation is still above their 2% target (we’ll get a look at core PCE tomorrow), while moderating growth and employment could warrant a rate cut. In the end, the economy is still pushing forward and defying those who have been calling for recession for a couple of years now.
As for stocks, by the close the Dow Jones Industrial Average was down 171 points to finish the day at 44,461. The S&P 500 was down 7 points to close at 6,362. The Nasdaq Composite Index was up 31 points to close at 21,129. Gold was down $58 to trade at $3,322 per ounce, while oil was up $.98 to trade at $70.19 per barrel WTI.
After the close, we will get earnings from both Microsoft and Meta. Then tomorrow, we will get earnings from Amazon and Apple. I said there was a lot to deal with this week. Hang in there, we are working our way through it all.
Have a nice evening everyone.
