Wall Street Fades into the Close, Options Expire with a Whimper

Wall Street Fades into the Close, Options Expire with a Whimper

$DIA, $SPY, $QQQ, $RUTX, $VXX

FLASH: Fed’s Bullard: Rate Cut Will ‘Ratify’ What People Already Expect

An interest rate cut may be necessary now, but that does not mean the Fed is on a path to dramatically lower rates, St. Louis Fed President James Bullard said Friday.

Mr. Bullard, who argued unsuccessfully for such an immediate cut at the FOMC’s last meeting, told reporters it would be “very difficult” at this stage to not deliver.

Cutting rates could reset people’s expectations for inflation and reset relative US government bond prices, or the “yield curve,” to a level more conducive to growth. But it may take time to see, said Mr. Bullard, who has endorsed a 25 basis point rate cut for the 30-31 July meeting in DC.

Signals were that we were highly likely to ease at the July meeting – so now that’s all been priced into the market – so if you try to take that out I think it would be very difficult at this stage,” Mr. Bullard said on the sidelines of a conference at Columbia University. “So you might as well follow through and ratify that and then see how the economy develops going forward.”

The Bond markets already point to a willingness by investors to revisit their inflation expectations, he said.

The Fed is under pressure to cut rates dramatically and end that shedding of bonds, most notably by President Trump, who Friday accused the central bank of a “faulty thought process” and also called for an end to “quantitative tightening,” a reference to the bond runoff.

Friday, the major US stock market indexes finished at: DJIA -68.77 at 27154.20, NAS Comp -60.75 at 8146.49, S&P 500 -18.50 at 2976.61

Volume: Trade on the NYSE came in at 803-M/shares exchanged

  • NAS Comp +22.8% YTD
  • S&P 500 +18.7% YTD
  • DJIA +16.4% YTD
  • Russell 2000 +14.8% YTD

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish with Key indicators still flashing Very Bullish for the week ended 19 July 2019.

Have a terrific weekend.

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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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