Friends
I’m not sure if anyone was paying attention on Monday, but it appears that what was working during Monday’s shortened trading session was being sold today, and the momentum stocks such as Amazon, Apple, Facebook and Google all were bought with enthusiasm, after several sessions of being under selling pressure. So the second half of the year rotation, basically lasted one day. I’m half kidding, of course, but it does seem that day to day sectors seem to fall out of favor, only to be back in favor a day or two later.
As for today, by the close the Dow Jones Industrial Average was down 1 point to finish the day at 21,478. The S&P 500 was up 3 points to close at 2,432. Gold was up $5 to trade at $1,224 per ounce, while oil was down $2.05 to trade at $45.02 per barrel WTI (so much for that rally). As opposed to Monday, Nasdaq was the big winner today, while the Dow and S&P treaded water.
Last month’s FOMC minutes were released this afternoon, and it seemed Fed officials were divided on rate hikes and balance sheet reduction. A few also showed concern about stock prices overheating. I think it would be unwise at this point to believe that the Fed’s path is a certainty. There seems to be a wide range of opinion about the course going forward and that could lead to inactivity. The market seems to be pricing in just one rate hike in the next 12 months, and that might seem reasonable given the mixed economic data we have seen in the first half of 2017. But, of course, the direction of the economy in the second half of the year will likely influence the “data dependent” Fed. We will see.
Have a nice evening everyone.
