If the goal of the Fed Chair Jerome Powell and the Federal Open Market Committee was to provide a positive catalyst for the market, they couldn't have done a better job.
They cut rates a quarter-point as expected and indicated that the economy was strong enough that another cut was not likely to be needed soon. But Powell also indicated that there would have to be a "significant move up" in inflation before any rate hikes would be needed.
It is a Goldilocks scenario -- low rates that are likely to continue for quite some time and an economy that isn't likely to fall into recession in the near term. It is no wonder that the indexes are at all-time highs.
Major earnings are rolling in and so far look quite good. Facebook (FB) beat estimates by a solid 24 cents and reported better-than-expected revenues, as well. Starbucks was in line with soft guidance, but a weak report was expected and the stock is up on the news. Twitter (TWTR) announced it's dropping all political advertisements and is getting hit on the news.
Apple (AAPL) is making a strong initial move on earnings of $3.03 vs. estimates of $2.83 and better-than-expected revenues. Guidance also looks good, and it is gaining momentum as the numbers are reported.
There was a lot of news Wednesday for the market to digest, and it would not be a surprise to see some choppiness and consolidation. This positive response from Apple is going to help keep momentum going and the Fed announcement helps to keep a bid under the market.
The indexes are at all-time highs, technical conditions are good, the Fed is market-friendly and Facebook and Apple are seeing positive responses to their reports. Bulls couldn't ask for a better combination of factors.
Have a good evening. I'll see you Thursday.
