The Federal Reserve reveals its plans for the post-crisis era

by Sep 20, 2017

The key market event today is undoubtedly the latest Federal Reserve meeting which comes later. Fed Chief Janet Yellen is likely to announce the central bank will keep interest rates where they are for the time being (1.25%). However she is also likely to detail the unwinding of the Feds massive balance sheet, as it moves away from its great recession policy. You can read more about what this means here.

Crucially for investors, Yellen may also drop hints about how many more times the Fed is likely to raise interest rates in future. This is important because it will indicate how much faith the central bank has in the US economy and its prospects for the future.
Some are worried that as the Fed tightens policy, it will put pressure on stocks, but regardless of what happens with the Fed, one analyst says equity investors needn’t worry. In a note to investors, Jeffrey Kleintop of Investment firm Charles Schwab said, “Since the financial crisis ended earnings growth is largely independent of central bank actions.” He said that corporate earnings, not central banks, are the real driver of the global equity rally.

In global stock indices this morning Germany’s DAX30 is the best performing index in Europe, while In Asia, India’s NIFTY50 sits firmly above 10,140, having gained well over 100 points since September began. In commodities, metals prices are higher today boosting mining stocks, whilst in currencies the Pound is the main mover, up sharply against the Dollar and Euro off the back of better than expected UK retail sales data. This uptick in the Pound has caused the FTSE100 to dip.

Speaking of stocks, last night shares in both FedEx and Adobe slipped after their latest earnings reports. FedEx lowered its 2018 earnings guidance so naturally the stock price fell, but even though Adobe reported robust growth – third-quarter net income of $419.6 million, compared to $270.8 million a year-ago, the share price slipped by around 3%. However, perhaps investors will feel more bullish today when the market opens and the share price may swing upwards, especially considering Adobe broke a corporate record for quarterly revenue.

Download on the App Store           Download on Google Play


Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.


Get the app
Share This