Posted on 12/13/2023 12:46:02 PM PST by chuck allen
The Dow Jones industrial Average jumped to a record Wednesday as the Federal Reserve signaled it would cut rates several times next year, satisfying investors who hoped the central bank would finally start to acknowledge the slowing trend of inflation with a less-aggressive monetary stance.
The 30-stock Dow added 374 points, or 1%. At its high of the day, the Dow touched 37,057.81 to surpass 37,000 for the first time and exceed its previous all-time high in January of 2022. The S&P 500 jumped 1% with bank and real estate shares leading the way, while the Nasdaq Composite climbed 1%.
The central bank held the benchmark overnight borrowing rate steady in the 5.25% to 5.5% range as expected, but more importantly it forecast three rate cuts in 2024, which was more than it had previously indicated. Investors have been increasingly hoping for the Fed to give a clearer signal that it would start cutting rates next year with recent inflation data easing.
(Excerpt) Read more at cnbc.com ...
Double top.
It means the same thing on Wall Street as double tap means on the mean streets.
You have been warned.
How does the selling of $1.6 Trillion in Bonds later next year fit in the Fed Scheme?
The pump before the dump
Highest ever NASDAQ Close was 16084 on Nov 19, 2021. Highest ever S&P close was 4797 on Jan. 3, 2022.
Excellent!
I always follow the DOW. I was wondering if the record would be broken.
We’ll see in 7 minutes if it holds as a record.
The way those auctions work is that the highest bidder determines the price for all bonds (weird but that is how they do it).
The international and domestic market will determine that rate.
No clue what those numbers will look like—six months these days is like forever in the markets.
My point is, if the Fed Rate is low who will buy $1.6 Trillion of Bonds?
Inflation had to catch up eventually.
5.56mm
Tje Chinese ans Japanese aren’t in the market now, why would they be in with lower rates?
And the Dow closes at 37,090, 291 points above the previous all time high.
Dow up 512
NASDAQ up 200
S&P up 51
It’s a good day!
There is a price for everything—the Fed does not set the final price for a US Treasury bond auction.
The Fed rate is just the rate it charges member banks for borrowing at the Fed window. The banks can take it or leave it—unless they are out of cash—in which case they will take it. ;-)
Gotta make those end-of-year bonuses, don’t you know?
These trading house boys and fund managers need new yachts. BTW, that doesn’t mean you.
I have looked into the Chinese and Japanese bond purchases and it is complicated but it seems like most of the transactions are simply international trade balance sheet accounting entries.
As long as there is trade between the US and these countries then they will need ready access to dollars.
10 year yields have fallen 100 bp from the peak, too.
Economy looking like goldilocks.
The ten year bonds are a crazy gamble at this point.
The odds are ridiculously high that inflation will wildly reignite at some point in the next ten years given the federal deficits and debt.
“You have been warned.”
Thanks. I will file it with all the other warnings.
“Double top.
It means the same thing on Wall Street as double tap means on the mean streets.”
The last high was 2 years ago.
If you’re going back that far then don’t all new highs create a “double top”?
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