Oct 8th 2014 – Stocks Rocket After Fed Minutes

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Market View:

What a yoyo the last 2 days have been.  Yesterday in my remarks I had said that the one curve ball to break up what was going to be a tight sideways market was the Fed Minutes.  However, I did not expect such a broad rally on the back of some words on paper.

In the medium term this is good news for the stock market, the Fed is basically saying to the economy, we have your back.  So it is good news for equities for sure.

But on the down side for me, it does appear to be a short term bottom indeed and it happened so fast I wasn’t able to capitalise on it.  At the end of the day as the above quote spells out, in such a volatile market with crazy swings up and down it is better to wait for calmer waters and not overtrade!

Market News:

U.S. stocks ended about 2 percent higher on Wednesday as markets extended gains on the FOMC minutes and recovered from Tuesday’s selloff.

Closing 274.8 points higher, the Dow Jones Industrial Average had its best day since December 18, 2013. The index rose more than 275 points in intraday trade, briefly touching 17,000 and surpassing Tuesday’s 273-point loss. The S&P 500 and the Nasdaq had their best day since nearly a year ago on October 10, 2013.

Stocks had traded flat to modestly higher before surging on the release of the Fed minutes in the early afternoon. The report showed that the Federal Reserve staff cut their growth outlook due to the higher dollar, as a number of committee participants had concerns with global weakness.

Thursday:

IMF fall meeting

Earnings: PepsiCo

Chain store sales

8:30 a.m. Initial claims

9:00 a.m. Philadelphia Fed President Charles Plosser on monetary policy

10:00 a.m. Wholesale trade

10:30 a.m. St. Louis Fed President James Bullard, opening remarks at St. Louis Fed conference

10:30 a.m. Oil inventories

11:00 a.m. ECB President Mario Draghi at Brookings, DC

11:00 a.m. Fed Vice Chair Stanley Fischer at Brookings on ECB

1:00 p.m. 30-year bond auction

1:10 p.m. Fed Gov. Daniel Tarullo on regulatory reform

1:15 p.m. Richmond Fed President Jeffrey Lacker on growth and the labor markets

1:30 p.m. Fed’s Fischer at IMF on global economy

3:40 p.m. San Francisco Fed President John Williams on economic outlook

News Sources:  CNN Money & CNBC

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