Good earnings from Apple (AAPL) and Boeing (BA) had the market in a positive mood and when the dovish Fed announced it was now even more dovish it produced an euphoric reaction. The market wanted the Fed to confirm its recent dovish turn and it not only did that but virtually eliminated any chance of a rate hike in the near term.
To the business media this is all fantastic news but there was plenty of complaining among market players that joked the Fed isn't data dependent, it is market dependent and is dovish only as a reaction to the market.
There was some surprise at how quickly Jerome Powell has changed his tune. Sixty days ago he was aggressively hawkish and now he aggressively dovish with the only thing that really changed in that time period was the stock market.
For most market players that are heavily long this is great action. They really don't care why the Fed is doing what it is doing as long as it causes stocks to go up immediately. It is much more problematic for market players that want to put more cash to work and they are now forced to chase a market that feels like it is being manipulated higher by the Fed.
To complicate matters there are big reports coming tonight from Microsoft (MSFT) , Facebook (FB) and Tesla (TSLA) . Expectations aren't quite as low as they were before Apple but this market is, once again, running over anyone that is looking for "sell the news" reactions even though the news isn't always that great.
Microsoft is reporting inline revenues but is a penny short of EPS expectations. The numbers are similar to what Apple reported but expectations are higher for Microsoft and it isn't see a positive reaction so far. Facebook is ahead on both revenues and earnings and is trading up sharply on the news.
The market continues to reward earnings even when they aren't that great but when the Fed is this dovish it really doesn't matter what is being reported.
Have a good evening. I'll see you tomorrow.