Friends
Where do I begin? It wasn’t that today’s decision by the Fed to not raise interest rates was much of a surprise. The markets may have been sniffing that out all week. What was a surprise was the language in the statement and Ms. Yellen’s comments in the press conference. Basically, the Fed has turned its attention to global weakness. Remember all the talk this year about the “dots” and domestic economic data points? Well, evidently they weren’t all that important. If the Fed wanted to move today, they had enough ammunition to do so. Instead they sought out a new reason not to move. A reason that would seem likely to take quite a while to play out. Now, evidently the Fed needs to see China and other global concerns calm down before we address domestic monetary policy. Ok, I get that they don’t want the dollar appreciating anymore. That has been very destructive for U. S. multi-national corporations. But what criteria do they use to measure all this global concern – the stock market? Once again, the decision not to begin liftoff is not a shocker, that was a 50/50 proposition anyway. But now we have a new mandate. My guess is that the market participants are somewhat confused.
As for today’s stock market, we had modest gains going into the press release, and then a nice rally afterward. But as the last hour wore on, confusion ensued and stocks gave up the gains. By the close, the Dow Jones Industrial Average was down 65 points to finish the day at 16,674. The S&P 500 was down 5 points to close at 1990. Gold was up $12 to trade at $1131 per ounce, while oil was down $.17 to trade at $46.98 per barrel WTI.
We’ll catch our breath, and get back at it tomorrow. It will be interesting to see how traders respond after a good night’s sleep to today’s proceedings.
Have a nice evening everyone.
