Market expectations for a dovish Fed were very high and Jerome Powell and crew did not disappoint.
Although there was no surprise rate cut, the Fed policy statement and the Fed Chair's press conference made it clear that they are ready, willing and able to roll out a series of cuts. By the closing bell, the market had priced in a 100% chance of a cut at the next meeting in July.
The pundits were busy chopping, dicing and slicing the changes in the policy statement but the only thing that matters is that they are clearly dovish. The bears were hoping that there might be some "sell the news" action and they are arguing that a promise of future rate cuts will be ineffective in combatting a struggling economy. However, there is nothing the market loves more than an endless supply of cheap capital.
In view of how important the Fed decision was Wednesday, there was limited volatility and a rather sedate reaction. The indices slowly climbed into the close but the gains were mild and there weren't any major intraday swings.
Breadth was good with 4,700 gainers to 2,550 decliners with banks being the biggest laggard due to issues with the yield curve.
Technically the market continues to look good with the breakout of the recent trading range holding up well. The S&P 500 is now within a few percentage points of challenging the highs hit in early May.
The focus will now shift back to progress on a China trade deal but with an uber-dovish Fed in place, the bulls will have some good support while they wait.
I am hoping that now that we are past this big macro event we will see more focus on individual stock-picking. The bulls are in control and those that thought the Fed may produce a different result this time are disappointed.
Have a good evening. I'll see you Thursday.