Friends
With the Fed apparently threading the needle (of course interpretations could change by tomorrow), and some surprising reactions to better-than-expected earnings releases, stocks moved powerfully higher. As expected, the Fed raised the Fed Funds rate by another 75 basis points bringing the rate to 2.25%-2.50%. In the press conference after the release the Fed Chair insisted that rates will likely move higher by year end but remained committed to being data dependent. The market sensed enough conviction to continue the inflation fight but also enough flexibility to be able to address an economic slowdown. As I said, at least for today market participants appeared satisfied.
On the earnings front, the companies that reported last night saw some very nice share price reactions today. Google and Microsoft were both up big despite coming in just shy of some estimates indicating that prices may have been sufficiently beaten down leading into the earnings releases. As for the rest of the market, by the close the Dow Jones Industrial Average was up 435 points to finish the day at 32,196. The S&P 500 was up 102 points to close at 4,023. The Nasdaq Composite Index was up 469 points to close at 12,032. Gold was up $14 to trade at $1,732 per ounce, while oil was up $3.39 to trade at $ 98.37 per barrel WTI.
We’ll get a look at second quarter GDP tomorrow, but both the Fed and the White House don’t believe we are in a recession at the moment. We’ll let others battle over those definitions. For now, we’ll enjoy today’s rally and won’t get carried away trying to read too much into it.
Have a nice evening everyone.
