Wall Street ended on a firm note despite as expected FOMC neutral minutes

  • Dow Jones Industrial Average put on 63.12 points, or 0.2%, to end at 25,954.44.
  • S&P 500 index climbed 4.94 points, or 0.2%, to 2,784.70.
  • Nasdaq Composite put up just 2.30 points to 7,489.07. 

Wall Street ended on a firm note on Wednesday despite the slight disappointment tin the FOMC minutes that failed to guide markets on just how dovish members are. The outcome was neutral, much in line with Mester’s (hawk turning neutral) and Willliam’s rhetoric from earlier in the week. Almost all participants wanted to stop reducing the balance sheet later this year which helped the indices along for positive closes. 

Key statements form FOCM minutes, (Source LiveSquawk):

  • Participants noted maintaining current target range for fed funds rate ‘for a time’ posed few risks at this point.
  • Staff gave options for ending balance sheet runoff in h2 this year.
  • Almost all officials wanted to halt b/sheet runoff in 2019.
  • Many officials unsure which rate moves could be needed in 2019.
  • Policymakers agree it is ‘important’ to be flexible in balance sheet normalization.
  • Policymakers agree it would be appropriate to adjust if necessary.
  • Several participants saw further hikes appropriate in 2019 if economy evolved as expected.
  • Patient posture allows time for ‘clearer picture’.
  • – ‘few officials’ not concern over uncertainty not captured in dot plot;
  • – seen strong household data recently;
  • – officials note concerns over slowing growth, China;
  • – concerns over trade, shutdown, fiscal policy;
  • – seen some downside risks increase;
  • – officials note volatility, tighter fin. Conditions.

DJIA levels

  • Support levels: 25793 25704 25619
  • Resistance levels: 25969 26052 26141

The technical indicators in the DJIA are still positive on a weekly time frame, although are now mixed nearer term. A pullback will likely test the commitments of the bulls at the 76.4% Fibo at 25668 which could spark a flurry of profit-taking flurry back to the 50% mean reversion of the rally from the latest swing low to 25631. An additional bid and extension in the rally would likely look to 26277 as the 2nd Dec swing highs.

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