Friends
Nothing like jumping the gun. Stocks rallied mightily today on hopes that the Fed is going to begin to cut interest rates as soon as tomorrow, and on a tweet from the President that he had spoken to Chinese President Xi. Add in departing ECB head Draghi’s dovish statements and you have a trifecta of positive events for the bulls to run with.
By the close, the Dow Jones Industrial Average was up 353 points to finish the day at 26,465. The S&P 500 was up 28 points to close at 2,917. Gold was up $6 to trade at $1,349 per ounce, while oil was up $2.17 to trade at $54.09 per barrel WTI.
We’ll get the Fed decision tomorrow at 1:00 our time, and then the Fed Chair’s press conference at 1:30. I would be surprised if the Fed actually cuts interest rates tomorrow, but it appears the markets are hopeful. I do think that the FOMC and the Fed Chair will try to make it clear that they are ready to cut as soon as the July meeting, if the economic data warrants it. But, he has to be careful not to cast fear that things are deteriorating so quickly that the Fed has to come to the rescue. We’ll find out if the market is already pricing in that cut (it appears so), and what the reaction will be if market participants/Fed watchers don’t get the cut or at least the language they so dearly desire. Stay tuned, we’ll let you know how it all plays out tomorrow.
Have a nice evening everyone.
