Stocks closed higher yesterday after the FOMC announcement on rates.

The markets were down to start off the day. And stayed that way, even for a while after the Fed announced their widely anticipated 25 basis point rate hike.

But once Fed Chairman, Jerome Powell, began his press conference, stocks turned around and began climbing, with most of the indexes closing up by 1% or more. (The Nasdaq was up 2%.)

The Fed indicated that they still expected the terminal rate to hit 5.1% by year's end. And that they expect ongoing increases in interest rates to be appropriate.

With the Fed Funds midpoint now at 4.63%, that suggests two more quarter-point rate hikes at their next two meetings in March and May.

However, at Mr. Powell's press conference, he said that "we can now say for the first time, the disinflationary process has started." But he acknowledged that it remains elevated. And that he sees a slow process for it to come down. But said that "if we do see inflation coming down much more quickly, that will play into our policy setting, of course."

Some traders took that to mean that the Fed might very well pause after their March rate hike. In fact, Fed Fund traders are betting on it as they are expecting only one more 25 bps hike and then calling it quits, which would put the midpoint at 4.88%.

So that will be the debate in the market on rates and inflation until March.

In the meantime, we've got two more rounds of inflation numbers to get thru between now and then, and two more employment situation reports to get thru as well, with the next employment report due out on Friday.

In other news, Meta Platforms (formerly known as Facebook), posted a positive EPS surprise of 41.5% after the close yesterday, and a positive sales surprise of 2.74%. They were up 2.79% in the regular session leading up to their announcement, and up about 19% in after-hours trade.

Today we'll hear from heavyweights Apple, Amazon, Alphabet (Google), Ford, and Starbucks to name a handful. All in all, we'll hear from 217 companies ready to report.

The S&P put in their best January since 2019. The Nasdaq put in their best since 2001.

And February is off to an impressive start as well.

Between easing inflation, improving economic outlooks, and a host of favorable seasonal tendencies, 2023 is shaping up to be a strong year.

To read more about why you should be excited about today's market and how to take full advantage of it, be sure to check out our latest commentary...

Why You Should Be Excited About Today's Market

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