Stocks Rally Ahead of the Fed

The stock market did a big about-face yesterday. Stocks opened lower, then rallied, then gave it all back. On Tuesday, the S&P 500 closed at its lowest level since October 27. The yield on the 10-year bond got as low as 2.05%. There seems to be a good chance it could fall below 2%. In the summer of 2012, the 10-year got to 1.43% which I believe is an all-time low. I didn’t think we could ever get that low again. Now I’m not so sure. Yesterday, oil dropped down $53.60 per barrel before closing at $55.51.

Stocks are up again this morning but it seems much more cautious out there. Energy is leading the way while most of the broader market is up on small gains.

The Fed meets later today. I don’t expect much but they will update their projections. Last time, only two of the 17 members said they expect interest rates to rise in 2016, meaning the central bank will hold its powder dry all year. I’ll be curious if more members feel that way now.

Posted by on December 17th, 2014 at 10:15 am


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