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MarketBeat Minute(2023-12-14)
Equity markets cheered the FOMC's latest policy shift but should not be sanguine. The Fed's shift is likely short-lived, given the impact of the news on oil and equity markets. The Fed signaled at least three quarter-point interest rate cuts in 2024, clearing the runway for oil and risk-on asset demand. In this environment, inflation could easily accelerate, leading the FOMC to revert to its tighter stance.
The S&P 500 gained more than 1.25% at the height of the session as investors loaded up on deep-value stocks with high yields and a significant chance of outperforming bonds as interest rates fall. Capital invested in such names will continue to pay the same 4% to 6% yield as bonds indefinitely, with the added bonus of capital appreciation.
The bad news is that the technical outlook for the S&P 500 continues to deteriorate. The market moved higher with a solid gain but indicators such as MACD and stochastic are overbought and diverging from the action suggesting growing weakness as the rally grinds higher.
The S&P 500 gained more than 1.25% at the height of the session as investors loaded up on deep-value stocks with high yields and a significant chance of outperforming bonds as interest rates fall. Capital invested in such names will continue to pay the same 4% to 6% yield as bonds indefinitely, with the added bonus of capital appreciation.
The bad news is that the technical outlook for the S&P 500 continues to deteriorate. The market moved higher with a solid gain but indicators such as MACD and stochastic are overbought and diverging from the action suggesting growing weakness as the rally grinds higher.
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By MarketBeat MinuteEquity markets cheered the FOMC's latest policy shift but should not be sanguine. The Fed's shift is likely short-lived, given the impact of the news on oil and equity markets. The Fed signaled at least three quarter-point interest rate cuts in 2024, clearing the runway for oil and risk-on asset demand. In this environment, inflation could easily accelerate, leading the FOMC to revert to its tighter stance.
The S&P 500 gained more than 1.25% at the height of the session as investors loaded up on deep-value stocks with high yields and a significant chance of outperforming bonds as interest rates fall. Capital invested in such names will continue to pay the same 4% to 6% yield as bonds indefinitely, with the added bonus of capital appreciation.
The bad news is that the technical outlook for the S&P 500 continues to deteriorate. The market moved higher with a solid gain but indicators such as MACD and stochastic are overbought and diverging from the action suggesting growing weakness as the rally grinds higher.
The S&P 500 gained more than 1.25% at the height of the session as investors loaded up on deep-value stocks with high yields and a significant chance of outperforming bonds as interest rates fall. Capital invested in such names will continue to pay the same 4% to 6% yield as bonds indefinitely, with the added bonus of capital appreciation.
The bad news is that the technical outlook for the S&P 500 continues to deteriorate. The market moved higher with a solid gain but indicators such as MACD and stochastic are overbought and diverging from the action suggesting growing weakness as the rally grinds higher.