Daily Market Update – March 17, 2016 (Close)
Yesterday the focus was much more on the FOMC and Chairman Yellen.
The take home message was that the economy wasn’t growing as fast as had been hoped and the world’s economies are even worse.
As a result, the FOMC believes that it will have fewer interest rate increases in 2016 than it had planned.
Somehow, that’s good news.
I understand why it may offer some more time for people to get cheap money to play with, but the increases that the FOMC had in mind weren’t going to leave money more expensive for those borrowing, in any real terms.
Instead, a less than optimistic picture was painted, but traders liked it.
This morning, as it all sank in, stock futures had been all over the place.
They were moderately higher and then equally moderately lower, both bordering on triple digits.
In the meantime, stocks looked as if they might spend another day diverging from oil, which was again moderately higher.
Sooner or later I expected that had to happen, but as long as oil is going higher, I’d have liked to have seen some delay in everyone coming to their senses.
Based on the futures inability to get on a single frame of mind, I thought that today may very well be a day of confusion as various sides try to figure out whether yesterday’s FOMC news was good or bad.
Still, with yesterday’s close, the DJIA was at its highest for 2016, so it’s as if the first 6 weeks of trading never even happened.
It’s as if 2016 hasn’t even happened yet.
Ultimately, it seems that stocks decided to rejoin with oil and yesterday’s FOMC decision and rationale for the decision was still being embraced.
Although the market closed beneath its high for the day, the S&P 500 is now just very slightly in the red for the year as the DJIA is in the black.
Who would have thought?
Based on the number of trades that I’ve made in the first 10 weeks of 2016, you would be excused for believing 2016 had never even started yet.
Hopefully, that will change before the next interest rate hike.