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May 20 2015

Markets are moving marginally higher

Market Recap 051915:

It was another light trading day in the market as investors continue to weigh evidence of a recovering US economy against the inevitability of a rate hike. Positive economic news, signaling a pick up from disappointing 1Q numbers, cause investors to worry that a rate hike could come quicker while poor economic news point to fears that the 1Q slowdown could spill into the current quarter. However, a continuing stagnation would force the Fed to kick the rate hike further down the road. It is clear that at this juncture, investors aren’t sure what scenario they favor. This uncertainty is leading to vacillation in the markets even as the averages continue to test and surpass record highs. The Dow notched another record close in yesterday’s session despite rising by only .07%, while the other major averages closed with marginal losses. Among the sectors, Financials and Healthcare led the way for the second consecutive day while Energy and Telecom stocks lagged. The dollar meanwhile recorded its best day against the Euro in over two months, rising by 1.5%, after news that the ECB planned to frontload bond purchases of its QE program during May and June in anticipation of decreasing liquidity in the summer months. 

Looking Ahead:

Markets are moving marginally higher this morning as investors eagerly await the release of the minutes from the FOMC’s April meeting. With no major economic data in the docket, the minutes, which will be released this afternoon, will be parsed for more insight on Fed thinking. Though investors shouldn’t expect a clear indication of when the rate will take place, the Fed’s outlook and overall assessment of the current state of the US economy hold significant importance. Aside from the release of the minutes, investors also have another round of retailer earnings to digest today with Target (TGT) and Lowes (LOW) reporting among other. In overnight trading, the Treasuries are moving slightly higher while the dollar is continues its recent rally versus the euro.

Make sure to listen to Money Matters with Gary Goldberg this Sunday at 11:00 AM on WOR 710 AM Radio to hear our latest economic and market analysis. Visit our website www.ggfs.com for details.