Wednesday proved to be an
eventful day in the markets following the Federal Reserve’s announcement that
they would hold on increasing interest rates. There was an initial sell-off
after the announcement but then the markets rebounded significantly before the
closing bell as investors appeared to embrace the news. In early trading today,
both the Dow and the S&P 500 are down in what seems to be a profit taking
move. Economic news is mixed this morning. On the positive side, the four week
moving average for initial claims fell below 260,000 for the first time since
1973 for the week ending October 24. Conversely, the GDP report
showed that the U.S. economy slowed to an annual growth rate of 1.5% in the
third quarter, down from 3.9% in the spring. The decline was due mostly to a
smaller buildup in warehouse inventories, so its market impact was not
significant. Oil is up almost 1% following yesterday’s 6% rally, while gold is
trading down heavily in reaction to a potential Fed rate hike in December.
Overall October has turned out to be very promising so far. Both the Dow and The
S&P 500 are up nearly 9% for the month.
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