Thursday, February 01, 2007
Fed Day Joy!
The Fed delivered the perfect report to the markets. This was on top of some healthy GDP numbers delivered in the morning.
The Dow ended Wednesday's session with a gain of 98.38 points to 12,621.69. The SPX added 9.42 points to finish on 1,438.24. We are in the green and looking ok.
The advanced reading for the fourth quarter GDP got the day off to a good start when growth accelerated 3.5 percent. This was well above third quarter growth of just 2.0 percent and exceeded analyst expectations of 2.0 percent. The fact that inflation pressures eased also helped stocks with the core deflator for PCEs coming in at 2.1 percent. Even though the Fed comfort level is 2.0 percent, inflation pressures were seen to be easing which was good.
However the real catalyst for stocks was the Fed statement. The Fed left rates unchanged, as expected, but it was the minor changes in the statement that were viewed as bullish. The statement noted that the economy continues to firm with the housing market stabilizing. At the same time, the Fed did state that inflation pressures are easing and should continue to do so over time. Though the committee did say that further rate hikes could be necessary, it all depends on future incoming data.
Crude prices were again higher once again Wednesday, helping lift oil related stocks. Weekly inventory data showed that crude reserves rose by 2.7 million barrels. However, worries about production cuts taking place starting Thursday pushed the commodity higher by 2.1 percent to close above $58 a barrel.
Thursday is again going to be another busy day. Google annouce their figures and the personal income report and the ISM Index will also be released.
These reports could have an impact on trading so watch out.
Until next time.
The Dow ended Wednesday's session with a gain of 98.38 points to 12,621.69. The SPX added 9.42 points to finish on 1,438.24. We are in the green and looking ok.
The advanced reading for the fourth quarter GDP got the day off to a good start when growth accelerated 3.5 percent. This was well above third quarter growth of just 2.0 percent and exceeded analyst expectations of 2.0 percent. The fact that inflation pressures eased also helped stocks with the core deflator for PCEs coming in at 2.1 percent. Even though the Fed comfort level is 2.0 percent, inflation pressures were seen to be easing which was good.
However the real catalyst for stocks was the Fed statement. The Fed left rates unchanged, as expected, but it was the minor changes in the statement that were viewed as bullish. The statement noted that the economy continues to firm with the housing market stabilizing. At the same time, the Fed did state that inflation pressures are easing and should continue to do so over time. Though the committee did say that further rate hikes could be necessary, it all depends on future incoming data.
Crude prices were again higher once again Wednesday, helping lift oil related stocks. Weekly inventory data showed that crude reserves rose by 2.7 million barrels. However, worries about production cuts taking place starting Thursday pushed the commodity higher by 2.1 percent to close above $58 a barrel.
Thursday is again going to be another busy day. Google annouce their figures and the personal income report and the ISM Index will also be released.
These reports could have an impact on trading so watch out.
Until next time.
# posted by Paul @ 4:39 AM 
