RE: Sp17 Mar 2022 12:43
From Zacks.
"Stocks soared again yesterday with the Dow up another 1.55%, the S&P up 2.24%, and the Nasdaq up 3.77%.
Both the Dow and the S&P have exited correction territory and are now 'just' in pullback territory. The Nasdaq remains in correction territory, but is well off their correction lows.
The war on Ukraine continues.
President Zelensky addressed both chambers of Congress yesterday morning. As expected, he asked for a no-fly zone, and for fighter jets to help in their fight against Russia. But knowing the administration's position on those two items, he said in lieu of that, he's asking for more weapons so the Ukrainians can continue their fight.
Afterwards, the White House announced another $800 million in military aid, on top of the $200M that was announced over the weekend. The package will include anti-aircraft systems, anti-tank systems, anti-armor systems, and other munitions.
Congress recently just passed a budget that set aside $13.6 billion in Ukrainian aid. So it looks like even more aid, both military and humanitarian, will be made available as well.
In other news, the main event for the financial markets was the FOMC announcement.
The Fed finally raised rates (first time in more than 3 years), by 25 basis points, as expected.
Here's the numbers that matter: they said the Fed Funds rate could hit 1.9% by year's end, and they are expecting rates to reach 2.8% by the end of 2023. They are also expecting rates to remain at 2.8% in 2024, meaning they are not expecting any further rate hikes after next year.
They are expecting PCE inflation to come in at 4.3% by year's end, 2.7% in 2023, and 2.3% in 2024.
And they are forecasting GDP growth at 2.8% this year, 2.2% in 2023, and 2.0% in 2024.
Fed Chair, Jerome Powell, also commented on how strong the economy was and how strong the labor market was. He went so far as to say he thought the economy would "flourish in the face of less accommodative monetary policy."
The Fed also suggested they could begin reducing their balance sheet as early as May 4th, which is when their next 2-day FOMC meeting concludes.
Stocks were already higher in anticipation of the rate hike. But the market clearly liked what it heard. And after a quick bout of intraday volatility, stocks raced back up and rallied into the close.
The markets still have more work to do as they are down for the year, not to mention from their highs.
But with the Fed finally taking action on inflation, and with forecasts for solid GDP growth for each of the next 3 years, the threat of a recession is looking more and more unlikely."
GLASH
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