(As of 7:15 am PST)
Let the Santa Claus rally begin…or not. Do you remember those Christmas’s when you
pretty much knew what you were getting but there was still great anticipation
when you actually opened the presents? That’s what yesterday seemed like when
the Fed announced the decision to raise interest rates after almost of decade
of zero bound rates. We basically knew it was coming and now we wait with
anticipation to see how investors will react to this historic event. The major
indices responded positively post announcement and ended yesterday with an
impressive rally. The increase in the benchmark interest rate was a quarter of
a percentage point and the decision was a vote of confidence for the U.S.
economy. The Fed also set the stage to increase rates further in 2016 but assured
us that they would be raised in a gradual manner. The markets are trying to
find reason to continue the rally today but seem to still be cautious given
some of the underlying factors like dropping oil prices and an uptick in the
dollar. The economic news out today is mixed. Initial claims were better than
expected and the Philadelphia Fed Index was worse than experts predicted. We
will have to wait and see if Santa Claus will really come this year.
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