US Stocks at Record Highs as Fed Hikes Rates

US Stocks at Record Highs as Fed Hikes Rates

US Stocks at Record Highs as Fed Hikes Rates

$DIA, $SPY, $QQQ, $VXX

  • The Trump Rally Extends

The Fed followed through on an expected interest-rate increase and raised their forecast for economic growth in Y 2018.

“Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further,” the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington. Inflation will remain below the Fed’s 2 percent goal in the near term but “stabilize” around the target in the medium term, the central bank said.

In a Key change to the statement, the Fed omitted prior language saying it expected the labor market would strengthen further.

Instead, Wednesday’s missive said monetary policy would help the labor market “remain strong.” That suggests Fed officials expect improvement in the job market to slow.

The 7-2 vote for the rate move, the Fed’s 3rd this year, raises the benchmark lending rate by a quarter percentage point to a target range of 1.25  to 1.5%.

The Fed also confirmed that monthly roll-offs from the central bank’s balance sheet would step up, as scheduled, to $20-B from $10-B beginning in January.

Through the policy adjustments and the statement, the Fed continued to seek a delicate balance between responding to positive news on growth and unemployment that encouraged gradual tightening, while signaling caution due to persistently weak inflation readings that have befuddled policy makers.

Wednesday, the US Labor Department data showed consumer inflation, excluding food and energy, was lower than expected at 1.7% in the 12 months through November.

“Hurricane-related disruptions and rebuilding have affected economic activity, employment and inflation in recent months but have not materially altered the outlook for the national economy,” the Fed said.

Repeating language used since June, the FOMC said that “near-term risks to the economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely.”

Wednesday, the major US stock market indexes finished at: DJIA +80.63 at 24585.43, NAS Comp +13.48 at 6875.80, S&P 500 -1.26 at 2662.85

Volume: Trade on the NYSE came in at: 875-M/shares exchanged

  • NAS Comp +27.7% YTD
  • DJIA+24.4% YTD
  • S&P 500 +18.9% YTD
  • Russell 2000 +12.3% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Very Bullish (0.64) Bullish (0.49) Very Bullish (0.83) Very Bullish (0.58)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Very Bullish (0.67) Very Bullish (0.60) Very Bullish (0.81) Very Bullish (0.58)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.45) Neutral (0.02) Very Bullish (0.65) Very Bullish (0.69)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.44) Very Bearish (-0.50) Very Bearish (-0.57) Bearish (-0.25)

Stay tuned…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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