MARKETS HIT NEW HIGHS AS THE FED CUTS RATES AGAIN, EARNINGS GROWTH INCREASES AND A GOLDILOCKS JOBS REPORT IS RELEASED

Weekly Market Performance

• U.S. stocks climbed to new record highs amidst a slew of positive actions and data, including the Fed cutting rates for the third time this year, another Goldilocks jobs report and a softening of the U.S. and China trade spat that has been in the news for the better part of a year and a half
• NASDAQ led the way with a jump of 1.7% on the week, followed closely by the S&P 500’s 1.5% gain, which pushed both to end the week in record territory
• The small cap Russell 2000 rose even more than the other U.S. indices, moving up 2.0% on the week, whereas the narrowly–focused mega–cap DJIA moved up 1.4%
• The Federal Reserve cut interest rates for the third time this year and in very strong language telegraphed that another rate cut is unlikely soon (there is only one more Fed meeting in December)
• The Fed cut the target range for the fed funds rate by 25 basis points to 1.50-1.75%
• Eight of the 11 S&P 500 sectors were green when the week ended, led by Health Care, which jumped 3.0% and Information Technology and Industrials, both up more than 2.0%
• On the downside, Real Estate lost 0.7% on the week and Energy was negative once again, declining 0.3%
• The 2–year U.S. Treasury yield declined to 1.56% and the 10–year yield declined to 1.71%
• The U.S. Dollar Index fell 0.6% to 97.24

Weekly Market Performance

The Fed Cuts Rates for the Third Time This Year

On the heels of the Fed announcing its intent to buy short–term Treasury debt at an initial pace of $60 billion a month, the Fed decided to cut rates for the third time in 2019, in an effort to boost a slowing economy.

In fairly strong language, the Fed telegraphed that it may be done trimming rates, at least in the short term (there is only one more Fed meeting in mid-December):

“We took this step to help keep the economy strong in the face of global developments and to provide some insurance against ongoing risks,” Fed Chair Jerome Powell said. “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook.”

Fed–watchers interpret the Fed\’s language to mean that another rate cut in December isn\’t going to happen, unless the economy takes a turn for the worse.

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