Powell Hawkish, Market Bullish


S&P 500 sets new record high

Strong hawkish signals from Fed Chairman Jerome Powell that he is, for now, finished cutting interest rates failed to incite terror in the Us stock market.

Quite the opposite: the S&P 500 erased early losses and rose as much as 0.4% during the final hour, sending it back to record territory.

Unlike last year, when stern words from Mr. Powell ignited the worst Q-4 for equities in a decade, investors had faith his current pause does not amount to an abandonment of their Zero rate goals.

Despite signaling a rate cut pause, the FOMC delivered its 3rd consecutive rate cut, while expanding its balance sheet with the S&P 500 at all time highs, US GDP running above potential and unemployment at 50 yr lows. We understand why the markets do not fear much these days; the Fed has ceded monetary policy decisions to market expectations.

President Trump is right, and what we are seeing is alignment as the market believes rates could move lower 1st before moving higher, inflation pressures are muted. 

Wednesday, the major US stock market indexes finished at: DJIA +124.99 at 27196.45, NAS Comp +36.83 at 8313.69, S&P 500 +12.01 at 3048.90

Volume: Trade on the NYSE came in at 837-M-shares exchanged

  • NAS Comp +25.2% YTD
  • S&P 500 +21.5% YTD
  • Russell 2000 +16.6% YTD
  • DJIA +16.5% YTD

HeffX-LTN’ overall technical outlook for the major US stock market indexes is Bullish to Very Bullish in here.

Looking ahead

Investors will receive the following data Thursday: the Personal Income and Spending report for September, the Employment Cost Index for Q-3, the weekly Initial and Continuing Claims report, and the Chicago PMI for October.

Stay tuned