Not surprisingly, the Federal Reserve resumed raising interest rates with the central bank giving the nod for its third 0.25% rate hike on Wednesday, in a near-unanimous move. Relatively steady economic improvement, employment and wage gains and a sense that inflation is starting to tick selectively higher were likely behind the latest rate adjustment. Markets reacted positively to the follow-up statement that the Fed will probably stay its course and not accelerate its tightening of monetary policy any time soon with only two more rate hikes this year. The Dow Industrials responded with a 113-point advance on the guidance.
For the week, however, markets saw little change with the Dow virtually flat and the S&P 500 moving higher by only 0.25%. The NASDAQ did a bit better hitting a record high on Thursday and the small-cap Russell 2000 benefited with a nearly 2% spike. Transportation stocks took a bit of a tumble losing about 1.5%, with airlines primarily to blame. High-yielding telecoms and utilities welcomed the Federal Reserve’s stance on not tightening more than expected and rose 1.3% on average. Basic material stocks were also strong and, except for financials and healthcare, all sectors were in the green.
There have been a few dents in the bull market recently, with stock prices having pulled back a bit on concerns about interest rates and the doings in our nation’s Capital. The lagging transportation sector is also a bit troubling. Overall, though, stocks remain strong and near all-time highs, with valuations, consequently, still rich.
Here is the answer to last week’s trivia question: Which of the following S&P 500 companies is not headquartered in Atlanta? Coca-Cola, United Parcel Service, Home Depot or General Mills. Answer: General Mills, the maker of Pillsbury, Green Giant, Cheerios and Häagen-Dazs has its headquarters in Minneapolis.
Today’s Trivia Question: Russian energy giant Lukoil trades on the Moscow Exchange as its primary market place under the symbol LKOH. In the U.S., shares can be purchased on the? New York Stock Exchange, Over-the-Counter Marketplace, NYSE MKT or NASDAQ.