[Chart courtesy of MarketWatch.com]
- Moving the Markets
I had to laugh this morning when some news reports called the Nasdaq as having “plunged” in view of Apples weakness (-1.68%). It turned out that the Nasdaq merely retreated a meager -0.3% which appears to be, in that ‘new normal’ world we’re living in, quite a noteworthy drop. Go figure…
Of course, all eyes were on the Fed’s announcement about interest rates and the scaling back of the stimulus program. Indeed, they did come clean and projected the month of October to be starting point for the ‘great unwind’ of their massive $4.5 trillion balance sheet. However, they added that the reduction would be conducted “gradually and predictably,” at a rate of some $10 billion a month. They also signaled that a December rate hike may be still on the table.
As you can see from the above chart, the reaction was the usual one, namely a quick but modest sell-off followed by a rebound with only the Dow and S&P managing to climb back into the green and in the process setting new records. In ETF space, Transportations (IYT) came roaring back sporting a solid +1.48% gain. Aerospace & Defense (ITA) and MidCaps (SCHM) did well by adding +0.63% and 0.45% respectively. On the downside, our winner YTD, namely Semiconductors (SMH) lost -1.33%, while the International SmallCaps (SCHC) gave back a more modest -0.31%.
The yield on the 10-year bond rose by 1 basis point to end the session at 2.24%. Trading in a broad range was the US Dollar (UUP), which ended up +0.80% higher, however, it still hovers below its 50-day M/A and in bear market territory.