The market celebration of a dovish Fed on Thursday came to a quick end Friday when the Fed backtracked on comments from the New York Fed president John Williams. Williams had suggested the potential for a half-point cut at the Fed meeting later this month, and the market quickly accepted the idea. The fat then made a special announcement to clarify Williams remarks and confirmed essentially that a quarter-point increase was the most likely outcome of the meeting on 31 July.
It was incredibly bad communication from the Fed, which has underlined that it is focused on being transparent. It killed the cruise that evolved on Thursday and changed emotions.
In addition to the Fed, a very good Microsoft performance report (MSFT) failed to provide sustained speed. The shares went up sharply, but trained most of the day and finished with only $ 0.20. This was a solid report with a high earnings rate, but the shares failed to gain a profit for the day, which is not good, as well as the earnings season will pick up next week.
Headlines That The Iranians Took Two British Oil Tankers Didn't Help It is also about, even though it helped to bounce off oil-related stocks that have been in sharp decline.
Fed backtracking not only caused stocks to change course, but also dollars, precious metals and bonds. A quarter-point increase is well anticipated at this time and without realistic hope for a larger average, it is likely that the news has already been discounted. We must now wait and see how revenue reports develop next week, but as Microsoft did on its wonderful report, we need to be a little worried.
Have a great weekend. I'll see you on Monday.
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