Fed Pivots and Stocks Explode

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Four months ago the Fed was talking about further rate hikes in 2024 and now it's talking 3 rate cuts. And guess what? That decision was based on all the positive economic reports we have been seeing. Inflation is down — as is gas but food prices remain high. 

In today's Fed turn around, Chairman Powell said: I have always felt there was a possibility the economy could avert recession while inflation came down, and so far that's what we are seeing. 

The result is not guaranteed, but when he said that, the ES exploded higher. At the end of the day, both the ES and NQ closed up 1.4%. The YM (Dow Future) settled at an all-time new high at 37,111, basically 300 pts above the old contract high. All three major indexes are on track for their seventh consecutive weekly gains. Yields on the benchmark bond — which touched 5% just weeks ago — are about a full percentage point lower, closing Wednesday at 4.032%.