Stocks soared yesterday with all of the major indexes up about 1%.
They were already up from the opening bell, but added to their gains after the Fed said they would likely begin tapering their bond-buying "soon," which many have interpreted as their next meeting in November.
The market cheered the last time the Fed hinted that the tapering was likely to come sooner rather than later. And the market's reaction was no different this time.
Why so happy about tightening monetary policy (albeit just a little)?
Because 1) it shows the Fed's confidence in the recovery, and 2) it shows they won't let inflation get too hot before acting. And that's reassuring to the market.
As for rates, those expect to remain near zero for the foreseeable future.
While two more Fed policymakers (9 out of 18 this time vs. 7 out of 18 last time), see rates beginning to go up as early as sometime in 2022, half don't see it until sometime in 2023.
In other news, MBA Mortgage Applications showed the composite index rose by 4.9% w/w (purchases were up 2.0%, while refi's were up 7.0%).
Although, Existing Home Sales slipped a bit (-2.0% m/m, and -1.5% y/y), coming in at an annualized rate of 5.880 million units vs. last month's 6.000M, and views for 5.900M. (Still a solid number though.)
Today we'll get Weekly Jobless Claims, the Chicago Fed National Activity Index, the PMI Composite report, Leading Indicators, and the Kansas City Fed Manufacturing Index.
The economic recovery continues. And full-year GDP growth looks set to be one for the record books. Quite frankly, it's looking more and more like the beginning of a multiyear boom.
And one area that looks like it's getting ready to soar is renewable energy. With all of the money going into renewable energy projects, big gains are likely to follow. And the push to go green is not just here in the U.S., but around the globe. To learn how to cash in on the clean energy revolution, be sure to read our latest commentary...
Cashing In On a Cleaner Future
Best,
