June 18th 2014 – S&P Ends At Record High After Fed Statement

Market View:

Another rally following the Fed new conference.  It seems that the Fed Committee is seeing enough improvement to buoy optimism, yet enough caution to have the Fed continue to support the market by taking any changes in interest rates very slowly indeed.

This was seen as very positive news by market participants as the Indexes shot up shortly after the press conference.  Now we are back to all time highs we may break out again to the upside for a few days.

Market News:

U.S. stocks climbed on Wednesday, lifting the S&P 500 to a record finish, after the Federal Reserve continued to taper its asset purchases, as expected, and said the economy is rebounding.

Fed Chair Janet Yellen reiterated the central bank’s commitment to essentially go easy for some time; and that very understandably supports the equity markets.

The Federal Open Market Committee cut its monthly asset purchases by another $10 billion to $35 billion, as expected.

Fed Chairman Janet Yellen told a news conference that inflation was expected to move gradually back to the central bank’s 2 percent target.

Wednesday’s economic reports included a sharp drop in mortgage applications last week, while the Commerce Department said the U.S. current account deficit widened in the first quarter.

U.S. stocks have risen in recent days as M&A and upbeat data on manufacturing offset worries about violence in Iraq and rising energy costs.

On Wednesday, Reuters reported the head of Iraq’s state-run South Oil Company Dhiya Jaffar as saying ExxonMobil had carried out a “major evacuation” of staff and BP had evacuated 20 percent of its workers from the country.

International News:  European stock markets finished mixed.

Russia’s main index rose almost 1.5% after Russian President Vladimir Putin and Ukrainian President Petro Poroshenko discussed the possibility of a ceasefire in eastern Ukraine. The ruble made similar gains versus the U.S. dollar.

Asian markets ended with mixed results. The Nikkei in Japan rose by nearly 1%, but markets in India and China were in negative territory.

Investors will continue to watch Argentinian markets, since many fear the country could be close to defaulting on its debt. The Argentine stock market has rebounded strongly the past two days.

Thursday

Earnings: Oracle, Blackberry

8:30 a.m.: Initial claims

10:00 a.m.: Philadelphia Fed survey

10:00 a.m.: Leading indicators

News Sources:  CNBC and CNN Money