As I wrote on Monday, the quarter-ending window dressing would be in full force this week as traders were going to take markets higher to get a profit on client statements.
Well Fed Chief Janet Yellen lit the rocket fuel with her “gradual gradualism” remarks yesterday at the NY Economic Club.
Yellen assuring traders that the Fed rate rise would be measured and contingent on global growth, which she said posed additional hurdles to the US economy.
Translation: No rate rise in the immediate future. My translation: Clear sailing until after the election.
Equities had a 150 point rise on the Dow from Yellen’s comments as the dollar was pounded in the Forex markets by the Fed chief’s words.
Just as an aside gold soared $22 and silver had a larger percentage gain as some investors figured the Fed may be talking down the dollar for sometime to come.
Futures on Wednesday were up triple digits on the Dow as the dollar was weakened by 0.4% and the yield on the 10-year note was down to 1.81%.
On Friday we’ll tally up the moves from last Thursday’s close to show the Easter miracle the markets pulled off.
So while I don’t believe the US economy is in any great shape, I do not see why your portfolio should fight the Fed going into the election. It looks like the launch pad is set, and the Dow Jones, S&P, Nasdaq and bond prices are set for lift off.
Can I get a roger, Washington?