thependulumswings

Friends

Nothing like jumping the gun. Stocks rallied mightily today
on hopes that the Fed is going to begin to cut interest rates as soon as
tomorrow, and on a tweet from the President that he had spoken to Chinese President
Xi. Add in departing ECB head Draghi’s dovish statements and you have a
trifecta of positive events for the bulls to run with.

By the close, the Dow Jones Industrial Average was up 353 points
to finish the day at 26,465. The S&P 500 was up 28 points to close at
2,917. Gold was up $6 to trade at $1,349 per ounce, while oil was up $2.17 to
trade at $54.09 per barrel WTI.

We’ll get the Fed decision tomorrow at 1:00 our time, and
then the Fed Chair’s press conference at 1:30. I would be surprised if the Fed
actually cuts interest rates tomorrow, but it appears the markets are hopeful.
I do think that the FOMC and the Fed Chair will try to make it clear that they
are ready to cut as soon as the July meeting, if the economic data warrants it.
But, he has to be careful not to cast fear that things are deteriorating so
quickly that the Fed has to come to the rescue.  We’ll find out if the
market is already pricing in that cut (it appears so), and what the reaction
will be if market participants/Fed watchers don’t get the cut or at least the
language they so dearly desire. Stay tuned, we’ll let you know how it all plays
out tomorrow.

Have a nice evening everyone.

Jim