Fed Makes the News by Doing Nothing
With markets falling prey to the coronavirus, investors are in need of good corporate earnings, robust economic indicators, and a pep talk from pitchside Fed Chair Jay Powell. How about all at once?
Economic bellwethers began coming through bright and early yesterday. The difference between America’s imported and exported goods lined up with forecasts, lifting the value of the US dollar, and making it cheaper for confident consumers to buy foreign products. Pending home sales came in under par, but investors cast that aside when the Federal Reserve announced it was holding interest rates steady. That’s the lead story!
“Decision Day” had come just at the right time for JayPow. He was able to sympathize with traders worried about the coronavirus, and promise to “monitor the situation” in case the global workforce comes under threat by it. As his speech went on, however, he did more to help out bond investors than stock investors, expressing discontent at inflation stuck under 2%.
When it came to those good corporate earnings, Tesla lived up to the hype. Beating revenue expectations and notching 112,000 deliveries in the process will only fuel that booming share price higher.
Facebook investors got a nasty shock when expenses jumped 50%, but it was Boeing of all companies that came to the rescue! 737 MAX losses weren’t as bad as expected. Apple stock also hit a new record, and Microsoft topped analysts’ predictions as well. A stellar earning season so far, and hopefully, the runway cleared by the Fed for stocks in February!
