Friends
Here we go again. I’ll try to explain how this works. The minutes released today from the Fed meetings last month indicate that Fed governors are feeling just a little better about the recovery of this economy. That’s good news right? Well, not necessarily, because you see, what has fueled this advance in stocks over the last three years has been quantitative easing (easy money). Remember, don’t fight the Fed? Well, if things were to get better does that mean that the Fed will take away the punch bowl that has helped promote all the fun? In a word, yes. Remember, stocks rallied last week when market participants thought they had heard Dr. Bernanke firing up the blender during his many public comments. Now today, the Fed minutes indicate that we would have to see some deterioration from here before there would be additional QE forthcoming.
By the end of the day stocks, bonds and gold had suffered losses with the Dow Jones Industrial Average falling 65 points to close at 13,199. The S&P 500 was down 5 points to finish the day at 1413. Gold was down $32.50 to finish near $1647 per ounce and oil was down $1.04 to end the day near $104.19. After being down well over 100 Dow points, at least we did recover in the last few minutes of trading. Basically we just gave back what we gained yesterday.
We’ll let you know what the news is tomorrow. The fun part is determining if good news is good news or bad news is good news or……
Have a nice evening everyone.
