Friends
Well, the Federal Open Market Committee released its statement this afternoon, which was followed up by Fed Chair Yellen’s press conference, and the result was a rally in both stocks and bonds (not to mention gold and oil). Yes, the “patient” term was taken out of the statement, but Ms. Yellen performed like a contortionist when bending over backwards to let the markets know that just because it has been removed, don’t read anything into that. They are still data dependent, and by the way, the data other than employment number, is weakening. That’s right, the Fed lowered its near term economic forecasts (not a shock), but stands at the ready (to raise rates) should they be wrong (which again would not be a shock), and the economy and inflation get a little more frisky.
As for stocks, after being in the red before the statement release, the Dow Jones Industrial Average was up 227 points by the close to finish the day at 18,076. The S&P 500 was up 25 points to close at 2099. Gold was up $20 to trade at $1169 per ounce, while oil was up $1.69 to trade at $45.15 per barrel WTI.
So the good news today is that the Fed probably won’t raise rates this summer. The bad news is they won’t be raising rates because the economic data is deteriorating. Ok, bad news is good news, once again. The bulls will be hoping that earnings can hang in there despite the less than stellar economy, and justify the levels that we now find ourselves in. The fact that we’re still in a TINA environment will be the bull’s best friend.
Have a nice evening everyone.
