September 17, 2015

September 17, 2015 The FOMC held steady, leaving rates alone... but, in the Q & A, Janet Yellen continues to anticipate a rate increase by the end of the year! This is an important statement, and you see the market jump on that comment. Why, because the market wanted a "one and done". While we did not get the move today, the Fed continues to plan a move this year, and just one move, which should remove fears that the Fed would be too dovish. On the flip side, they lowered its longer term interest rate forecast and pushed out the 2.0% inflation forecast to 2018, suggesting that traders calm down about rates rising quickly. Our call on good news was to target Dow 17,200, S & P 2040, and NASDAQ 5000. We got close to that today, with the Dow lagging still. Tech is strong, pushing the NASDAQ closer to its 5000 target on this move. There is still concerns, and the Q & A has caused market volatility on when and how much the Fed might move. I would expect the market to do better once Yellen stops talking. "Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term. Nonetheless, the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate." This statement is acknowledgement that the moves slowing the economies in the BRICs will present headwinds for our economy. Add the downward pressure on inflation, obviously due to "transitory" pressure on Oil and commodities in general, the Fed opted to hold back on a move at this meeting. October is on the table. This rally will run into technical resistance near term. The good news is that we should see some shift in focus to earnings, especially for Consumer Discretionary, as we move into the shopping season. The consumer should be the main focus going forward. The market is unwinding months of nerves. However, we still see the near-term resolution to be more positive than negative. You can easily see why the Technical resistance at S & P 2040 comes into play. S&P 500 Marc
This entry was posted in Market Review. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *