Daily Market Update – February 11, 2016 (Close)
The market initially thought that it got Janet Yellen to say what it is that they wanted to hear.
Market investors are now convinced that further interest rate increases have to be off the table for 2016.
The initial reaction to Janet Yellen’s suggestion on Wednesday that such rate increases would be deferred was enthusiastically accepted, until realizing that even a March rate increase wasn’t really off the table.
That lead to a large turnaround in the DJIA, but the broader S&P 500 didn’t end the day faring as badly as the DJIA had done.
This morning, though, as the futures were preparing us for the opening bell, you had your choice of culprits to blame for the large losses looming.
You could point at Janet Yellen, who still had a chance to mollify her comments as she continued her Congressional testimony today.
Or you could blame the meltdown in European banks and the very idea that negative interest rates could be a possibility in more than just Japan.
Of course, there was also that issue of further steep declines in oil this morning and gold soaring past important resistance levels after a couple of years of doldrums.
So you could take your pick.
This was again, then, a day that started out as being very likely to be a day of sitting and watching the various tantrums play themselves out and then seeing who, if anyone, is left standing by the closing bell.
The answer was that no one was really left standing, although yet again the market found a way to bounce fairly higher from its big losses to finally end the day with only a big loss and not a much bigger loss.
So that’s good. Right?
For one, I’m just glad to have gotten some trades in early in the week, although it will remain to be seen whether finally adding a new position yesterday after a prolonged buying boycott was a good idea.
Like lots of other people, I was watching the gyrations as Janet Yellen’s session with Congress was televised and wondering why there is so much uncertainty among those who are supposed to know what they’re doing.
Today didn’t deliver that answer.
I don’t think tomorrow will, either.