Economic Journal - Friday, 5/20/2016

(As of 7:20 am PST)

Stocks are turning around Friday as mid-week selling pressure looks to have momentarily subsided. Fears of a June interest rate hike, which had markets in a tizzy earlier in the week, are being shrugged off Friday as market strategists re-evaluated several macro risks that may impact the Fed’s path forward on raising rates. The U.K. referendum in June and the US election this fall are two events being referenced that may put the brakes on the Fed’s interest rate increases. Whatever the case, we may also be seeing a relief trade Friday, as some commentators are looking at how well the market held up this week despite the renewed hawkishness from the Fed. Today is an options expiration day, also known as ‘quadruple witching’ which opens the door for some intraday swings on elevated volume and volatility. If the market holds on to these early session gains we’d be looking at a 0.3% weekly gain for the S&P500, remarkable considering the selling pressure earlier in the week. In overseas action today, most of the broad indexes are higher. Gold and oil are lower today while the US dollar and 10 yr. treasury yield ticked higher. 

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