Financial news

Fed Cuts Rates On Day GDP Beats Expectations, Sending Stocks To New All Time High

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Via Zerohedge

After Fed Chair Powell commented that “serious” inflation is required to push them to raise rates, bonds and stocks rallied along with gold as the dollar dumped…

Basically promising that “everything is awesome” and it it’s not, we’ll cut/ease and make it awesome again…

The yield curve flattened significantly, somewhat signaling a policy error…

Source: Bloomberg

Stocks were on the weak side ahead of the FOMC after Mnuchin jawboned expectations down on US-China trade deal and then Chile cancelled APEC. The initial hawkish-sounding statement sparked selling but when Powell said no hikes without serious inflation, stocks took off…

 

Trannies were ugly on the day (and Small Caps opened weak), but The Fed rescued most majors from red on the week…

The S&P 500 surged to new record intraday highs after Powell’s promises…

The odds of a trade deal slipped lower…

Source: Bloomberg

Somewhat oddly, Momo (and value) factors barely blinked around the Fed statement…

Source: Bloomberg

Also, defensives dominated the markets (once again) today, but both defensives and cyclicals jumped after Powell…

Source: Bloomberg

Bank stocks started to outperform on the goldilocks comments, catching down to the yield curve…

Source: Bloomberg

Deutsche Bank was ugly after earnings…

Source: Bloomberg

Treasury yields were lower on the day (and all back lower on the week)…

Source: Bloomberg

With the long-end notably outperforming…

Source: Bloomberg

The dollar reversed on Powell’s inflation comments…

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Source: Bloomberg

Cryptos slipped lower on the day…

Source: Bloomberg

Oil was weak, after inventory data, but PMs and copper rebounded on Powell’s dovishness…

Source: Bloomberg

Gold tumbled at the FOMC statement, then revsed hard on Powell’s comments, pushing futures up towards $1500…

WTI ended back below $55 after a surprise crude and product inventory build…

 

Finally, we note that December is now pricing in just a 23% chance of a rate-cut, and 76% odds of no change…

Source: Bloomberg

Which arguably leaves stocks pricing in far more easing that Fed Funds…

Source: Bloomberg

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