Nasdaq And S&P Hit New All-Time Highs Yesterday After Fed Cut Interest Rates By A Quarter Point As Expected Stocks closed mixed yesterday. While the Dow was lower, the Nasdaq and the S&P 500 both made new all-time highs. The Nasdaq led the way with an outsized gain of 1.51% and the S&P was up 0.74%. Yesterday's FOMC Announcement showed the Fed cutting rates by another 25 basis points, putting the Fed Funds midpoint at 4.63%.
At Fed Chair Jerome Powell's press conference, he said he was "feeling good" about the economy and that they've made "significant progress on inflation." But he acknowledged that, "even with today's cut, policy is still restrictive." That, of course, leaves the door open to another cut in December. But he essentially said they will look at the data and decide then, as they are "not on any preset course." He noted that "if the economy remains strong and inflation is not sustainably moving toward 2%, we can dial back policy more slowly. If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can move more quickly." But he reiterated that he believes the labor market is "cooling" at a "modest rate" and that it's "in balance." And that inflation is on a "sustainable path back to 2%." But "the job is not done on inflation." The Fed wasn't the only Central Bank to cut interest rates, as the Bank of England (BOE) cut rates on their key lending rate by a quarter point as well. This was their second rate cut this year, so far. In other news, yesterday's Weekly Jobless Claims rose 3,000 to 221,000, which was in line with estimates. The Productivity and Costs report showed Nonfarm Productivity up 2.2% (annual rate) vs. last quarter's 2.1% and views for 2.5%. Unit Labor Costs were up 1.9% vs. last quarter's 2.4% pace and estimates for 1.0%. Wholesale Inventories slipped -0.2% vs. last month's 0.2%. And Consumer Credit came in at $6.0 billion m/m vs. last month's $7.6B and the consensus for $12.0B. Today we'll get Consumer Sentiment and the Baker Hughes Rig Count report. And we'll hear from Fed policymakers Michelle Bowman and Alberto Musalem as they speak at their respective engagements throughout the day. Earnings season continues. Today we'll get another 131 companies on deck to report. With one more day to go, all of the major indexes are sharply higher for the week, and poised to close at record levels (or at least a 3-year high for the small-cap Russell 2000). It's been a busy week so far, but a good one if you're an investor. The momentum is on the market's side. Same for the seasonal trends as well. And that suggests more upside to go as we head into the end of the year. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
Post a Comment
Post a Comment