Friends
An army of Fed officials were speaking today, and they took the opportunity to try to take some of the enthusiasm out of the stock market. The bond market has finally sold off a little recently, but the rising stock market of late was not helpful to a Federal Reserve that wants economic and financial conditions to cool down. Hawkish Fed speak was expected today and the speakers delivered. Mission accomplished. Stocks moved lower.
For the day, the Dow Jones Industrial Average was down 431 points to close at 33,696. The S&P 500 was down 57 points to finish the day at 4,090. The Nasdaq Composite Index was down 214 points to close at 11,855. Gold was up $2 to trade at $1,847 per ounce, while oil was down $.59 to trade at $78.00 per barrel WTI.
This week’s slightly hotter than expected CPI number and much hotter than expected retail sales number probably has emboldened the Fed’s hawkish view. Higher for longer is more and more likely given recent data, and an even higher Fed Funds terminal rate is possible. But for now, we still think that a couple quarter rate hikes are in store for the next two FOMC meetings. In the meantime, let’s see how the week finishes out tomorrow.
Have a nice evening everyone.
