Most of the news early in today’s trading session is good news.
We have inching up on exchange indices early this morning, with the S&P up .2% and the Dow Jones Industrial Average up .1%. The NASDAQ meanwhile is up .5%.
All of this is in the context of all-time highs – drag the historical index chart out one month, or six months, or open it to the entire window showing the past four decades, and you still have both the S&P 500 and DJIA at resounding all-time highs.
The big hinge point, though, for today, is going to be Federal Reserve announcements at around 2:00 EST.
In the past few months, the Fed has been unequivocably adamant that they will not be raising interest rates soon. Now, analysts are looking at the likelihood of a new announcement showing no increase – although some analysts point to the very small possibility of an actual rate cut, which would be big news.
Leaving aside the possibility of a rate cut, Fed announcements are not likely to change markets a whole lot, although relief on no increase could actually propel stocks higher.
Analysts point out other green spots in today’s economic activity, such as an ADP report that “beat consensus estimates” according to CNN Business.
Another positive indicator is Apple’s increase of nearly 5% – as part of the renowned FAANG group (Facebook-Apple-Amazon-Netflix-Google), this tech stock sometimes helps set markets.
Then there’s the report from chip maker AMD which shows that firm is going strong, with higher cryptocurrency markets playing a role.
All in all, U.S. markets are riding high – but investors could be forgiven for making plays purely on Federal Reserve outlook, because that is so much a factor in what these markets do over time.
Investors have the opportunity to pursue profit-taking early today, and then buy back in later on a dip (according to wash sale rules).
Aside from that, investors can buy and hold the index, but they may be holding a long time if a market correction occurs.
Keep an eye out throughout today’s trading cycle and listen for any hints from the Federal Reserve Bank. The president and others have pressured Fed chairman Jerome Powell to hold rates low. Powell seems in accordance with that mindset, but eventually interest rates are going to creep back up, affecting housing markets and much more. Will it happen today? Stay tuned.