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Interest Rate Cuts
The Market Bull 2018

 
 
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The Market Bull – January 7, 2019

After struggling at the open stocks closed with large gains on little real news. Another round of trade talks with the Chinese marks the 6th attempt at resolving the dispute that so far has been pretty hard on the Chinese economy and produced some unwelcome effects here at home. Since 1950 the Fed has tightened interest rates 13 times, resulting in 10 recessions or a 77% probability. That said nobody saw them coming at the time. How does it go bull markets don’t die the Fed kills them.

The Institute of Supply Management non-Manufacturing or services index missed expectations falling 3.1 points to 57.6 in December.

A 5-month low. Declines were broad based, Prices Paid slipped to 57.6 a 17-month low.

What a difference a month makes. In December the odds of at least one rate hike in 2019 were nearly 73%. Fast forward to the present and we now have a nearly 39% chance of at least one rate cut. Between a sharply slowing Chinese economy, the Brexit fiasco and unstable stock and real estate markets here at home I would think the risks are primarily weighed on the downside at this point.

Standard and Poors 500 Index closed at: 2,549.69 up 17.75
NASDAQ finished at: 6,823.47 up 84.61
Gold ended trading at: $1,289.90 up $4.10

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