Market Indices as of Market Close March 16th, 2016
Dow 17,326 (-0.57% YTD)
S&P 2,027 (-0.82% YTD)
NASDAQ 4,763 (-4.86% YTD)
Global Dow 2,288 (2,033 52 week low /2,644 high)
10-year Treasury 1.97 (1.53 52 week low /2.50 high)
Gold 1,263 ($1,047 52 week low /high $1,288)
Oil $38.60 ($28.74 52 week low /high $65.71)
S&P 500, Dow end at 2016 highs as Fed pauses on rates
U.S. stocks advanced Wednesday, with the S&P 500 and Dow reaching 2016 highs, after the Federal Reserve kept its key interest rates unchanged and downgraded its forecast for the number of rate increases to two in 2016 from an earlier projection of four.
The S&P 500 SPX, +0.56% advanced 11.29 points, or 0.6%, to 2,027.22, marking a fresh 2016 closing high, led by a 1.7% gain in materials and a 1.6% rise in energy shares, as oil futures climbed on renewed hope for an output freeze.
The Dow Jones Industrial Average DJIA, +0.43% rose 74.23 points, or 0.4%, to 17,325.76, boosted by a 2.6% rise in shares of Caterpillar Inc. CAT, +2.62% The blue-chip gauge also logged its best finishing level of the year. Meanwhile, the Nasdaq Composite COMP, +0.75% tacked on 35.30 points, or 0.8%, to 4,763.97. The main indexes gyrated after the initial announcement, paring gains and then rallying, as Fed Chairwoman Janet Yellen discussed the Federal Open Market Committee’s decision during the news conference.
“The statement was neither dovish nor hawkish, but better than what investors were expecting,” said Mark Kepner, managing director of sales and trading at Themis Trading.
During the news conference, Yellen said the global economy is running a bit below expectations and acknowledged softness in exports and business investments, but noted that the global slowdown hasn’t affected the Fed’s baseline case for the U.S. economy.
The JP Morgan Take on the European Central Bank’s latest Round of Easing
The European Central Bank (ECB) unveiled several significant measures to support the Eurozone economy and push up inflation. Attacking on all fronts, Draghi signaled the central bank’s determination and markets were positively surprised by the breadth of what was announced. One of the ECB’s new measures was the addition of euro-denominated non-bank investment grade (IG) corporate bonds to their QE shopping list. The IG corporate bond market is much smaller compared to the sovereign bond market so the purchases should help to reduce financing costs for Eurozone companies and be supportive for European IG credit. High yield (HY) credit should also benefit as investors move down the risk spectrum into the even smaller HY markets in a search for yield as a result of falling IG spreads.
THIS DAY IN FINANCIAL HISTORY
March 16, 1915 FTC Begins Operations
President Woodrow Wilson devised the Federal Trade Commission (FTC) with intentions to establish global, open trade. In addition to its considerable economic impact, the FTC also marked an increase in power for the executive branch of government.
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.