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FOMC Decision Boosts Stocks and Bonds; Amazon's Phone Is a Hit With Investors
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

Following a slow start to the day, US stocks reacted very positively to today's FOMC announcement at 2:00 p.m.

The FOMC reduced its monthly asset purchases by $10 billion, as was broadly expected. The committee's statement reflected a less optimistic tone than the market had anticipated, with weaker growth noted in consumer spending. The committee's central tendency for 2014 real GDP growth was reduced to a range of 2.1% - 2.3%, from 2.8% - 3.0%, at its March meeting. Additionally, its median long-run Fed funds forecast was reduced to 3.75% from 4%. Lastly, the addition of Vice Chairman Fischer to the committee added another dovish forecast for Fed funds over the next three years. 

Both stocks and bonds rallied in reaction to the Dovish commentary from the Fed.

The S&P 500 (INDEXSP:.INX) finished up 0.77% at 1,957, breaking the record high from earlier this month. However, the strength was not quite so broad-based -- both the Nasdaq Composite (INDEXNASDAQ:.IXIC)  and Russell 2000 (INDEXRUSSELL:RUT) underperformed.

Importantly, the strongest sector was utilities, which is typically indicative of cautious sentiment.

Elsewhere, transport stocks impressed, led by FedEx (NYSE:FDX), which was up nearly 6% on better-than-expected fourth-quarter earnings. FedEx missed analysts' expectations in the last two quarters, setting the stage for a nice upside surprise.

Amazon.com (NASDAQ:AMZN) rose 2.62% to $334.16 after unveiling its highly-anticipated Fire Phone, which goes on sale soon at AT&T (NYSE:T). Amazon also benefited from positive comments by FedEx regarding e-commerce shipment activity.

Adobe Systems (NASDAQ:ADBE) was another winner, shooting up 8.17% on its own better-than-expected earnings report, driven by solid demand for its Creative Cloud service.

OpenTable (NASDAQ:OPEN), which is set to be acquired by PriceLine (NASDAQ:PCLN) for $103 per share, squeezed higher to finish at $105.17, implying that traders are speculating on a competing bid.

On the negative side, biotech, industrials, and housing names underperformed.

In international news, the Financial Times reported that the IMF is urging the ECB to conduct large-scale purchases of sovereign bonds to hold down rates and stabilize the Eurozone economy.

The situation in Iraq remains tense. Iraq asked the US for air support as ISIL (also known as ISIS) insurgents attempted to overtake the country's biggest oil refinery. Stateside, there has been heavy debate over just how much the US should get involved, particularly when it comes to the use of ground troops.

Tomorrow's Financial Outlook

Weekly jobless claims are scheduled to be released tomorrow morning. Claims are expected to remain near their average for the last four months at 313,000. Additionally, the second regional manufacturing survey for June, from Philadelphia, will be released. The survey is expected to drop to 14.0 from 15.4 last month, still showing strong growth.

Overnight, New Zealand will report first quarter GDP, the last developed market country to do so. Swiss National Bank will announce its rate decision tomorrow a.m. in what should be the morning's most important market event. It's expected that the SNB will lower its rate below zero in response to a similar decision by the ECB, to prevent excessive capital inflows into the country. If so, it would shift safe asset flows away from Switzerland and into the US or other highly-rated countries.

Oracle (NYSE:ORCL), considered a barometer stock for the corporate tech sector, is scheduled to report earnings tomorrow afternoon. Smith & Wesson (NASDAQ:SWHC), Kroger (NYSE:KR), and Rite Aid (NYSE:RAD) are all scheduled to report earnings as well.

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

FOMC Decision Boosts Stocks and Bonds; Amazon's Phone Is a Hit With Investors
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

Following a slow start to the day, US stocks reacted very positively to today's FOMC announcement at 2:00 p.m.

The FOMC reduced its monthly asset purchases by $10 billion, as was broadly expected. The committee's statement reflected a less optimistic tone than the market had anticipated, with weaker growth noted in consumer spending. The committee's central tendency for 2014 real GDP growth was reduced to a range of 2.1% - 2.3%, from 2.8% - 3.0%, at its March meeting. Additionally, its median long-run Fed funds forecast was reduced to 3.75% from 4%. Lastly, the addition of Vice Chairman Fischer to the committee added another dovish forecast for Fed funds over the next three years. 

Both stocks and bonds rallied in reaction to the Dovish commentary from the Fed.

The S&P 500 (INDEXSP:.INX) finished up 0.77% at 1,957, breaking the record high from earlier this month. However, the strength was not quite so broad-based -- both the Nasdaq Composite (INDEXNASDAQ:.IXIC)  and Russell 2000 (INDEXRUSSELL:RUT) underperformed.

Importantly, the strongest sector was utilities, which is typically indicative of cautious sentiment.

Elsewhere, transport stocks impressed, led by FedEx (NYSE:FDX), which was up nearly 6% on better-than-expected fourth-quarter earnings. FedEx missed analysts' expectations in the last two quarters, setting the stage for a nice upside surprise.

Amazon.com (NASDAQ:AMZN) rose 2.62% to $334.16 after unveiling its highly-anticipated Fire Phone, which goes on sale soon at AT&T (NYSE:T). Amazon also benefited from positive comments by FedEx regarding e-commerce shipment activity.

Adobe Systems (NASDAQ:ADBE) was another winner, shooting up 8.17% on its own better-than-expected earnings report, driven by solid demand for its Creative Cloud service.

OpenTable (NASDAQ:OPEN), which is set to be acquired by PriceLine (NASDAQ:PCLN) for $103 per share, squeezed higher to finish at $105.17, implying that traders are speculating on a competing bid.

On the negative side, biotech, industrials, and housing names underperformed.

In international news, the Financial Times reported that the IMF is urging the ECB to conduct large-scale purchases of sovereign bonds to hold down rates and stabilize the Eurozone economy.

The situation in Iraq remains tense. Iraq asked the US for air support as ISIL (also known as ISIS) insurgents attempted to overtake the country's biggest oil refinery. Stateside, there has been heavy debate over just how much the US should get involved, particularly when it comes to the use of ground troops.

Tomorrow's Financial Outlook

Weekly jobless claims are scheduled to be released tomorrow morning. Claims are expected to remain near their average for the last four months at 313,000. Additionally, the second regional manufacturing survey for June, from Philadelphia, will be released. The survey is expected to drop to 14.0 from 15.4 last month, still showing strong growth.

Overnight, New Zealand will report first quarter GDP, the last developed market country to do so. Swiss National Bank will announce its rate decision tomorrow a.m. in what should be the morning's most important market event. It's expected that the SNB will lower its rate below zero in response to a similar decision by the ECB, to prevent excessive capital inflows into the country. If so, it would shift safe asset flows away from Switzerland and into the US or other highly-rated countries.

Oracle (NYSE:ORCL), considered a barometer stock for the corporate tech sector, is scheduled to report earnings tomorrow afternoon. Smith & Wesson (NASDAQ:SWHC), Kroger (NYSE:KR), and Rite Aid (NYSE:RAD) are all scheduled to report earnings as well.

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

More From Minyanville Staff
FOMC Decision Boosts Stocks and Bonds; Amazon's Phone Is a Hit With Investors
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

Following a slow start to the day, US stocks reacted very positively to today's FOMC announcement at 2:00 p.m.

The FOMC reduced its monthly asset purchases by $10 billion, as was broadly expected. The committee's statement reflected a less optimistic tone than the market had anticipated, with weaker growth noted in consumer spending. The committee's central tendency for 2014 real GDP growth was reduced to a range of 2.1% - 2.3%, from 2.8% - 3.0%, at its March meeting. Additionally, its median long-run Fed funds forecast was reduced to 3.75% from 4%. Lastly, the addition of Vice Chairman Fischer to the committee added another dovish forecast for Fed funds over the next three years. 

Both stocks and bonds rallied in reaction to the Dovish commentary from the Fed.

The S&P 500 (INDEXSP:.INX) finished up 0.77% at 1,957, breaking the record high from earlier this month. However, the strength was not quite so broad-based -- both the Nasdaq Composite (INDEXNASDAQ:.IXIC)  and Russell 2000 (INDEXRUSSELL:RUT) underperformed.

Importantly, the strongest sector was utilities, which is typically indicative of cautious sentiment.

Elsewhere, transport stocks impressed, led by FedEx (NYSE:FDX), which was up nearly 6% on better-than-expected fourth-quarter earnings. FedEx missed analysts' expectations in the last two quarters, setting the stage for a nice upside surprise.

Amazon.com (NASDAQ:AMZN) rose 2.62% to $334.16 after unveiling its highly-anticipated Fire Phone, which goes on sale soon at AT&T (NYSE:T). Amazon also benefited from positive comments by FedEx regarding e-commerce shipment activity.

Adobe Systems (NASDAQ:ADBE) was another winner, shooting up 8.17% on its own better-than-expected earnings report, driven by solid demand for its Creative Cloud service.

OpenTable (NASDAQ:OPEN), which is set to be acquired by PriceLine (NASDAQ:PCLN) for $103 per share, squeezed higher to finish at $105.17, implying that traders are speculating on a competing bid.

On the negative side, biotech, industrials, and housing names underperformed.

In international news, the Financial Times reported that the IMF is urging the ECB to conduct large-scale purchases of sovereign bonds to hold down rates and stabilize the Eurozone economy.

The situation in Iraq remains tense. Iraq asked the US for air support as ISIL (also known as ISIS) insurgents attempted to overtake the country's biggest oil refinery. Stateside, there has been heavy debate over just how much the US should get involved, particularly when it comes to the use of ground troops.

Tomorrow's Financial Outlook

Weekly jobless claims are scheduled to be released tomorrow morning. Claims are expected to remain near their average for the last four months at 313,000. Additionally, the second regional manufacturing survey for June, from Philadelphia, will be released. The survey is expected to drop to 14.0 from 15.4 last month, still showing strong growth.

Overnight, New Zealand will report first quarter GDP, the last developed market country to do so. Swiss National Bank will announce its rate decision tomorrow a.m. in what should be the morning's most important market event. It's expected that the SNB will lower its rate below zero in response to a similar decision by the ECB, to prevent excessive capital inflows into the country. If so, it would shift safe asset flows away from Switzerland and into the US or other highly-rated countries.

Oracle (NYSE:ORCL), considered a barometer stock for the corporate tech sector, is scheduled to report earnings tomorrow afternoon. Smith & Wesson (NASDAQ:SWHC), Kroger (NYSE:KR), and Rite Aid (NYSE:RAD) are all scheduled to report earnings as well.

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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