Ho, hum: Another day another stock market record

Ho, hum: Another day another stock market record

Stocks climbed for a sixth straight day–the longest string of gains for the Standard & Poor’s 500 since August and with the Dow Jones Industrial Average turning in its best start for a February since 1931. The S&P 500 finished the day ahead 0.34% and the Dow gained 0.76% on the session. The NASDAQ Composite was up 0.95% and the NASDAQ 100 added 0.67%. The biggest winner for the day was the small cap Russell 2000, which gained 2.53% on strength in bank stocks and hope for more growth in the general economy. Oh, and the hope for $1,400 checks to individual Americans, hundreds of billions of dollars in state and local aid and enhanced federal unemployment benefits. And continued progress on the Covid-19 vaccination program. All this means, in my opinion, that the currently stretched valuations in this stock market are likely to get even more stretched in the coming days and weeks.

Federal Reserve does nothing today, says little that changes schedule

Federal Reserve does nothing today, says little that changes schedule

Today, January 27, the Federal Reserve’s Open Market Committee left their benchmark interest rate unchanged near zero. The Fed also said that it would maintain the current program of bond buying at $120 billion a month until “substantial further progress” toward its employment and inflation goals has been made. It made no changes to the composition of purchases leaving the split at $80 billion a month in Treasuries and $40 billion in mortgage-backed securities.

Inflation worries? You’ve got to be kidding but bond market starts to price in higher interest rates

Fed promises massive asset purchases for longer

Today’s (Wednesday, December 16) meeting of the Federal Reserve, the last of the year for the central bank, ended with the promise to maintain the current massive monthly bond purchases of at least $120 billion until the Fed sees “substantial further progress” in employment and inflation. This replaces the earlier promise to keep  buying “over coming months.” In other words the Fed’s bond buying policy now fits into the Fed’s interest rate framework of extraordinarily low for an extraordinary long time.

Federal Reserve does nothing today, says little that changes schedule

Saturday Night Quarterback says, For the week ahead expect…

Expect news from the Federal Reserve and from Congress on a government shutdown and a new coronavirus stimulus/relief bill. The Federal Reserve’s Open Market Committee meets on Wednesday, December 16. The markets expect the Fed to leave interest rates unchanged, but there’s likely to be verbiage out of the central bank that will move markets, although perhaps just fractionally.