HK was up 0.08% and Shanghai +0.55%. Japan was closed. The PBOC did not change interest rates this month.!!
European markets were mixed, Euro STOXX -0.15% and DAX +0.15%. The German PPI was -0.4% m/m and 4.1% y/y.
In the U S , the Atlanta Fed CEO inflation expectations edged up to 2.4% from 2.3%.
S&P 5000 +46.11, +0.89% to 5,224.62.
A flat open ended at 5,185 by 10:30. The market drifted lower, to 5,174 around 1:55 pm.
A few minutes after 2 PM it jumped to 5,200. After a small pullback it closed at 5,225.
The star of the day was Powell. There was no change as expected. Powell's presentation of the data was considered dovish. To the market it was a relief that nothing negative was brought up. This brought in short covering and trader buying.
During Q&A, the answers to questions was a series of market friendly answers. When asked if he was worried that the financial conditions had done a lot of easing already. He said he doesn't look at it that way. He said labor conditions were loosening. When the market was going down, he Fed said the market was doing its job for them.
Another question was if he was worried about the several month rise in inflation. He said he expects it continue a trend to decline. The forecasts were higher GDP, 2.1% from 1.4% previously. Inflation forecasts rose.
He talked about the Fed cutting the QT to a lower level, though continuing it for a longer time. He wants to avoid a potential problem like 2019. Finally, He said if labor conditions deteriorated they would take action. He wiped out worries that some investors think about.
The power of the rally was partly circumstantial. I mentioned yesterday the market was poised to possibly breakout on the upside at the 5,179 level. There was short covering. Traders were buying a breakout. Traders had some extra cash after the extreme selling last Friday, double normal volume.
Basically, momentum was revived and FOMO was in play. The market action increases confidence to buy. There are bargains in the bins of the market. See below. S&P versus IWM.
The DJIA rose 1.03%. The NASDAQ was up 1.26% and the QQQ 1.19%. The IWM increased 1.92%
WTI had a bad day, -$1.46 to 81.27. There was no apparent reason. Inventories were very favorable and Netenyahu reemphasized he is going into Rafah. The XOP gained 0.8%. The XLE slipped 0.1%.
The 10 yr T bond rate was volatile as the news came out, but ended down 1.5 bps to 4.281%. The KBWB jumped 2.4%, no worries!!! The XLU edged up 0.1%.
The VIX dropped 5.6% to 13.04. The advances led, the NYSE 3.5 to 1 and the NASDAQ 2.9 to 1.The volume was above average.
Tomorrow we will see how much follow through we can get with momentum back!!!
Blub
Jerry