Don’t Fear the Fed

Don't Fear the FedThe Federal Reserve has kept interest rates near zero since December 2008, but it’s signaling to Wall Street that a rate hike is likely later this year. The central bank last raised rates nine years ago. We all know that when interest rates go up, bond prices fall. However, what happens to US equities when interest rates rise?  The past is an imperfect guide, but looking back over tightening cycles since the inception of the S&P 500 in 1957, US stocks have fared well. Performance to the left measures S&P 500 change from interest rate low to high.

♦ Please note that my readings will change without notice,  so please don’t buy or sell solely based on anything you read in this blog. ♦

 

 

 

 

 

 

 

 

Happy Thanksgiving

thanksgiving-sugar-maple-leaves

With Thanksgiving right around the corner, USA Today published an article looking at the historical returns of the S&P 500 in the days surrounding the holiday.  Regardless of the time frame you analyze, Thanksgiving week has traditionally been bullish for US stocks.

Over the last 68 years, this week the S&P 500 has averaged a gain of 0.64% with positive returns 67% of the time. Looking ahead, between Turkey Day and December 31st the S&P 500 has ended higher 70% of the time with an average gain of 1.77%.

On a personal note, as we all reflect Thursday on that for which we are grateful, I offer my thanks to my clients and subscribers for your business and wish you a joyous holiday season.

♦ Please note that my readings will change without notice,  so please don’t buy or sell solely based on anything you read in this blog. ♦

 

A bullish election

In last week’s midRepublican Elephant and Democrat Donkey-term elections Republicans gained control of the Senate and come January, when newly elected Senators take the oath of office, Republican lawmakers will hold the majority of seats in both the House and Senate.  Hard to believe, but according to BTN Research this will be only the seventh year in the past five decades when Republicans had control of Congress with a Democratic President. The average S&P 500 gain in those earlier six years: +21.3%.

♦ Please note that my readings will change without notice,  so please don’t buy or sell solely based on anything you read in this blog. ♦