Wall Street Liked What it Heard From Chairman Powell

Wall Street Liked What it Heard  From Chairman Powell

$SDIA, $SPY, $SOX, $QQQ

The S&P 500 (SPY) approached record highs Wednesday after the Fed signaled potential interest cuts later this year, reassuring Wall Street investors worried that the US-China trade war could stall economic growth.

Saying it “will act as appropriate to sustain” economic expansion, the Fed signaled rate cuts of half a percentage point + over the remainder of Y 2019.

In its statement following a 2-day FMOC policy meeting, it held rates steady, as expected, but dropped the to be “patient” promise in adjusting rates.

That drove the S&P 500 and DJIA to less than 1% from their record high closes set in April.

The Fed delivered, it did no harm, it walked right up to a cut without doing it immediately. The cut will likely come in July absent some big trade or other news

Boosted by growing confidence the Fed will cut rates, and by hopes of an end to the US-China trade dispute, US stocks have climbed in recent weeks. The S&P 500 has gained 6% in June, and June is set to be the best June in 80 years.

“At the end of the day what the Fed want to do is give a nod to the market. Expectations had gotten so dovish that they need to give a nod to that, but at the same time not make any commitment and be forced to cut rates later on if conditions perhaps changed,” said the Chief Global Market Strategist at Invesco in New York.

Wall Street’s financial sector fell 0.2%, with bank stocks dipping 0.2%. Lower interest rates tend to hurt banks’ profits.

  • The DJIA rose 0.15% to end at 26,504.27 points,
  • The S&P 500 gained 0.30% to 2,926.44,
  • The NAS Comp added 0.42% to 7,987.32.

Advancers outnumbered decliners on the NYSE by a 1.65-to-1 ratio; on the NAS, a 1.40-to-1 ratio favored advancers.

The S&P 500 posted 48 new 52-week highs and 2 new lows, the NAS Comp recorded 63 new highs and 59 new lows.

Volume on all US exchanges was 6.5-B/shares, compared to the 6.8-B average for the full session over the last 20 trading days.

Seems like Mr. Powell keeps his Chairmanship for now.

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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