Lost in the midst of all the tariff talk today was this gem from St Louis Fed President James Bullard. “It is not necessary in this circumstance to raise the policy rate further in order to put downward pressure on inflation, since inflation is already below target.”
Ka-BOOM!
Yeah, markets have been afraid of a potential trade war with China. Yeah, the daily Twitter attacks on Amazon are a nuisance. But I think the institutional money - the BIG money that actually moves the stock market - seems to be most afraid of rising interest rates. Now Mr. Bullard does not actually have a vote on the Fed's interest rate policy this year (meaning his opinion doesn't necessarily mean anything), but presumably he's not the only guy who is seeing what's happening on the stock market lately. There is nobody in the world who wants to see stock markets enter a recession.
He gave that speech this morning, and suddenly a 600 point loss on the Dow became a 230 point gain. Now I'm no expert whatsoever, but both the S&P and the Dow closed above their previous highs, and well above their much talked about 200 day moving average. The next sign I'm watching for is for the S&P to close above 2659. We're still about 8% off the highs, so we have a way to go, but I'm suddenly bullish on the stock market again in the short term.
My current positions (most are relatively new). SPXL is a swing trade, rest are longs.
SPXL: 39.50
MU: 52.62
AAPL: 166.50
BXE: 1.21
CR.TO: 1.87
FRII.TO: 6.27
FAT.CN: 0.34
TNY.CN: 0.84
BNP.TO: 1.21
JET.V: 0.82
ADX.CN: 0.01
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