Transcript
Hello, everybody, welcome to Wednesday, the S&P 500 was down almost a half a percent today, a bit of a rollercoaster ride today up and then down and whatnot. This is a fairly typical pattern for a day when the Federal Reserve is making announcements. They ended their meetings today. And they announced that they’re going to keep interest rates at near zero through 2023. That’s fairly incredible. I’d never heard of that before. Usually, they don’t talk about anything that far ahead. It’s hard for me to imagine how they can really, you know, make that happen, if there is inflation, but they also did announced that they would let inflation run a bit longer, which does allow them to keep the interest rates lower for quite a bit more
. And again, the market surged on this news, as we’ve talked about before, when rates are at zero, you know, bonds are, you know, not paying that much CDs, bank instruments, money, markets are all paying very little. And the stock market starts to capture some of that money, because even at a dividend rate, you know, two or 3%, that looks pretty good in this environment. So that was great. But then the chairman of the Fed reserve, Chairman Powell, had a news conference. And he said some negative things about the economy, he’s trying to get the Congress to pass another stimulus bill, which he thinks is needed to help the Federal Reserve in their process of trying to support the markets and the economy. And this has happened twice now, actually, you know, back when everything was falling, they didn’t say anything negative, because they’re trying to support and get people to come into the economy in the markets.
And then when things start to recover, they’ve been saying, he especially has been saying more negative things, as an attempt to get Congress to put out more money. So that’s okay. There’s nothing really wrong with that last time the market dropped on that same news conference. But it went up, you know, pretty soon thereafter. So I’m not too worried about what happened today. There was a little bit of rotation today, some of the areas that haven’t been doing very well, when I called the reopening stocks, especially energy. We’re kind of at the top of the list today. But let’s see what happens. This is really fascinating with this interest rate story, and I think it’s something to keep an eye on as far as that goes. It’ll make a difference from the investing standpoint. So I look forward to seeing what’s going to happen tomorrow, and I will talk to you about that then. Thank you.