Skip to comments.Dow, S&P end at record highs after Fed's stimulus cut
Posted on 12/18/2013 1:16:37 PM PST by NormsRevenge
NEW YORK (Reuters) - The Dow and the S&P 500 closed at all-time highs on Wednesday after the Federal Reserve announced a small reduction in its stimulus program, confirming that the U.S. economy was on firm footing.
(Excerpt) Read more at finance.yahoo.com ...
S&P 500 gained 29.65 .. 1.66 percent.. 1,810.65
Break out the champagne and cigars, Wall Street!
“confirming that the U.S. economy was on firm footing.”
I am always baffled at how the MSM attributes a cause to why the stocks go up or down every single day and almost none of them have anything to do with how companies are performing.
I know, right.
US Federal Reserve pulls back on stimulus effort
The US Federal Reserve has announced a slowdown in its effort to boost the US economy.
The central bank said it planned to scale back its $85bn (£51.8bn) a month bond buying programme by $10bn a month.
Stimulus of this kind is designed to lower interest rates and boost economic activity
The Fed’s governing committee cited stronger job growth as a reason for the decision to pullback its programme of bond buying.
The announcement followed a two-day meeting in Washington DC.
US markets cheered the news.
The Dow Jones surged to close up 292.71 points, or 1.84%. Both the Nasdaq and S&P 500 indexes were up over 1% as well.
That is partially because, while significant, the amount of the pullback in bond-buying was slightly less than expected.
“Ultimately this a very small amount - it’s symbolic rather than more substantive,” Steve Wood, chief market strategist at Russell Investments, told the BBC.
“The takeaway from this is that while the Federal Reserve might be reducing the dosage of the antibiotic, they’re not going to be discharging the patient anytime soon.”
and when they do, it’ll be straight into the arms of Obamacare.
Uncle Ben didn’t want to go out as the GRinch that stole Christmas.
In the past, mere rumors of “tapering” cratered the markets.
confirming that the
U.S. economy was on firm footing Wall Street's pusher is still dealing
There we go......
But now liberals are flailing. And thi is why Bernanke is now tapering. Wall Streets views all this as a good thing for recovery.
lol.. It’s always ‘snowing’ somewhere on Wall Street.
The markets are relieved the Fed is making a very small cut, while suggesting rates would remain at their ultra-low levels even longer than previously stated.
In other words, the money printing continues for the indefinite future, at $75 BILLION each month. The party goes on.
The drunks were scared that the bar would be closed. Instead the new bartender just locked away the Everclear, keeping the whiskey, gin, rum and vodka flowing. DTs averted for now. I still don't want to be on the road when they are finally told that the bar is closed and they have to drive home.
yeah, just ask Kudlow!
It was fun to watch. The averages, DOW, etc. actually started off down slightly today. I was checking my own stuff when Ben’s mush showed up on TV. As soon as he started talking the whole shebang started climbing. The Dow actually closed about 272 but coasted up a bit more as all the weegy boards got toted up. Missing from todays happiness is that Monday and Tuesday were nice up days for many equities. Tuesday was actually a bigger X2 day for me than today. I was kind of hoping Beranky actually had something to say-—can you imagine how much good that would do?
Looks like 2013 starts and ends with a DJ +300 point day.
last I had looked it was barely above water, a couple hours later, booom.. we’ll take it..
“US markets cheered the news.”
So what is the deal here?
When the FED says they will not stop pumping money into the market, stocks go up.
When the FED says they will reduce the amount they are pumping into the economy, stocks go up.
I see a problem here. The market is based on a false economy.
There, I said it.
Just like there is NO inflation, according to the media propaganda thugs.
OH REALLY? Don’t these people go to the grocery store?
Oh yea, they have so much money they have someone take care of the little issues like buying food for the rulers.
Price is more, quantities are less. The new retail scam.
Meanwhile in the real world, the shares of Ford and GM went down today, with Ford collapsing more than 6%, due to the company’s lower-profit warnings for next year.
So, the automobile companies are expected to have a bad 2014, and the health-insurance companies can’t do well either since so few ObamaCare registrations are being recorded. Which to the Fed apparently means, happy days are here again.
...big wheel keep on turn'n...gravy-train keep'on roll'in!
...from Ben's Family to
Yours Ben's business ass ociates and their families!
...as for the rest of you...
"If they'd rather die, then they had better do it...and decrease the surplus population"
Fed tapering is now views as proof that the economy is on a firm footing? Maybe I am old school, but I always look to employment, economic growth, productivity. Watching the Fed’s actions for indications about the strength of the economy is kind of like seeking your friend’s opinion about how pretty a girl is. USE YOUR OWN EYES!
14 new product launches total i.e. Mustang, F150, Edge, etc. and the cost for tooling / plant will bite into it....
This “tapering” is like promising to go on a diet where you have been eating 10 chocolate cakes a week but you promise to “taper” it down to eating 9 chocolate cakes a week.
They told you to sell you should have bought what were you thinking.
A more "market" type comment...
The markets hate uncertainty. We now have a 2 year budget even though we think it stinks, it denotes Fiscal Normalcy ( of sorts ). Now Helicopter Ben denotes slight tapering, which could be construed as Monetary Normalizing. The 2 are the exogenous forces that could effect their ability to do business. These are at least on the surface, minimized.
With that said the drinks will flow, to you and I it is a form of insanity with all the other exogenous factors, but to them it is now party on...
However, you just pointed out why it is not so insane (normalizing, etc.)
I have seen how over the last 5 years when Obama fails Wall Street rejoices. This happened with the failure of cap and trade, extension of Bush tax cuts, failure to close Guantanamo, even gun control...and now Obamacare.
Makes sense to me.
Most of the new money is in the stock market. When the market does tank then the money goes to the stores. And the lenders. And the car lots. Etc.
My thoughts exactly. A $10 billion dollar a month cut means the politically connected are STILL getting $75 billion per month. And I seriously doubt that printed $10 billion will vanish out of the bond buying nonsense. Most likely it will end up propping up some other part of the stock market.
Most of my net worth is in equities (80% U.S., 15% Asia, 5% other), so I did very well today. And I've done quite well during Obama's Presidency. Why, I don't know. Obama gets no credit from me; as far as I'm concerned, my financial success under his hegemony has nothing to do with his policies.
The recent run-up in stock prices, if anything, makes me more cautious. Time to take some profits, and build up some cash?
Initial reaction was a steep drop in the DOW, I wouldn’t be surprised if the FED bought that whole rally...a gift to the incoming crop duster.
There are other reasons to cut the bond buying.
1. They can’t afford to keep borrowing for welfare AND buying their debt, so now they’ll only borrow to feed people.
2. You can’t have a fifth “recovery summer” and have bailouts and be taken seriously.
3. Tapering off the bond buying lets them say the economy recovered a year after Obama’s re-election.
SEll everything, move to Mars.
I don’t know. Just remember, don’t panic.
Jellystone could erupt at any time.. Or not.
Not me. I got off margin a few weeks ago, and I might go to 10-15% cash, or maybe even buy some physical gold. But my bias remains long in equities. Every instinct tells me that stock prices shouldn't be going up, but they are, and I'm not going to throw myself in front of the train.
Thank you, don’t forget to tip your waitress, I’ll be here all week!!