I am getting used to saying “another wild ride” in the markets. It seems like every day we are seeing 25-30 point swings in the S&P and today was no different. The GDP number was a joke, which in my mind takes June off the table for a rate hike.
The markets love a dovish fed and given the weak data recently, they have little choice but to wait for it to improve before they can make any changes in interest rates. The last thing the Fed wants to do is tank the market.
I really think we would have seen all time highs today if it weren’t for that awful GDP print. Still I firmly believe that given the very strong support that was shown once again around the 2090 area in the futures we will see a strong rally tomorrow. As every attempt to take this market down has rebounded on the sellers this week.
There are a few economic reports tomorrow morning including Vehicle sales that have been positive of late. That with a sprinkling of positive earnings could see a nice move higher from here. I will be so bold and say it is overdue.
U.S. stocks closed lower on Wednesday as investors remained on edge amid earnings as the Federal Reserve reaffirmed its data-dependent stance following a weak first-quarter GDP report.
The Federal Reserve Open Market Committee released its meeting statement on Wednesday afternoon that removed all calendar references and showed no new guidance on the timing of the rate hike.
Analysts had not expected a change to policy from this Fed meeting.
Earlier in the afternoon, the Dow Jones industrial average briefly fell more than 150 points as all the major indices declined on the morning’s weak GDP report.
The advance estimate of first quarter GDP showed an increase of 0.2 percent, a sharp slowdown from the fourth quarter’s 2.2 percent pace and below expectations of 1 percent growth. The government cited the strong dollar and the West Coast port strikes as negative factors.
Pending home sales data for March showed an increase of 1.1 percent, the fastest rate since last summer.
Mortgage applications gave back their gains last week, falling exactly as much as they had risen the previous week, according to the Mortgage Bankers Association (MBA). The decline came as interest rates edged higher.
European equities extended losses on the U.S. GDP report and awaited the outcome of a two-day meeting by the U.S. Federal Reserve.
Earnings: Chevron, CVS Health, Aon, Calpine, Clorox, Moody’s, Newell Rubbermaid, Duke Energy, Weyerhaeuser, TransCanada, VF Corp, Madison Square Garden, Legg Mason, CBOE
8:30 a.m.: Cleveland Fed President Loretta Mester
9:45 a.m.: Manufacturing PMI
10 a.m.: ISM manufacturing, construction spending, consumer sentiment
3:45 p.m.: San Francisco Fed President John Williams