Keep calm. US stocks closed close to breakeven Wednesday after the Federal Reserve published the minutes of its January meeting in the afternoon. The minutes were largely in line with recent public comments by members of the Federal Open Market Committee. British Prime Minister Theresa May traveled to Brussels for further talks on Brexit with European Commission President Jean-Claude Juncker.
(ticker: CVS) and Southwest Airlines stock (LUV) fell. Today After the bell, we …
- … consider the different opinions among FOMC members;
- … wonder if investors have switched to risk mode;
- … and speculate on how major currencies could evolve against each other over the next few days;
A fracture of the Fed
The markets have closed flat because the minutes of the Fed were largely in line with expectations. the
Dow Jones Industrial Average
earned 63.12 points, or 0.2%, at 25,954.44, while the
S & P 500
added 4.84 points, or 0.2%, to 2 784.7 and the
increased by 2.3 points, or 0.03%, to 7,489.07.
The Fed's January meeting was marked by a radical change in the central bank's monetary policy. But stocks have already risen sharply since then, the report released Wednesday has not had much impact on the market. However, the document provided investors with a better understanding of the factors that motivated the FOMC decision.
Although the agreement to suspend rate increases was unanimous, FOMC members expressed varying views on the length of the break and future directions. Some have argued that rate hikes may only be needed if inflation is higher than expected, while others have indicated that a continuously growing economy would be enough to justify a further increase in the federal funds rate.
This is not surprising, according to Michael Shaoul of Marketfield Asset Managementbecause the January meeting was just an attempt to calm the markets and give time for reflection.
During the meeting, committee members focused their attention primarily on the deterioration of financial conditions after the December meeting, as well as on the risk of a slowdown in economic activity outside the United States.
"Clearly, these two areas do not fall under the original FOMC" double mandate "," wrote Shaoul Wednesday. "But the Federal Reserve has long established itself as the guardian of the financial markets and the global economy because these two elements are ultimately the main drivers of US economic activity."
He added: "We are not saying that they were wrong to reconsider their decision, but after months of insistence that it is the economic data that would guide the policy, they actually gave the markets the main position for decision-making. "
Optimistic trade talks between the US and China have boosted sentiment, but investors are still watching the close trade deadline and the lingering threat of increased tariffs. While markets have weathered these concerns, investors are not yet willing to take risks, according to Jasper Lawler at London Capital Group. The dollar gained 1.9% against the Haitian yen in February, indicating that investors, even if they are a little worried, are still eager to take risks, Lawler wrote.
The latest data suggest that the UK labor market is resilient to the Brexit approaches. May went to Brussels to meet with European Commission President Jean-Claude Juncker, with the aim of renegotiating the controversial "support" agreement on the Irish border.
"The optimism of the impounders' traders is impressive given that the EU has continued to say that it would not accept any limit in the time of the Irish support mechanism and to refuse to Make changes to the agreement already concluded, "wrote Lawler. But against the dollar, the pound fell by nearly $ 1.30 after reports that no breakthrough was made during Wednesday's talks.
The hot stock
(GRMN) climbed to the top of the S & P 500 on Wednesday, thanks to an optimistic fourth quarter.
Garmin shares gained $ 12.09, or 17%, to reach $ 83.06.
The maker of navigation and fitness equipment earned $ 1.02 per share for a business turnover of $ 932.11 million. Analysts were looking for earnings per share of 80 cents on a $ 893.14 million business figure. For the entire year, EPS of $ 3.70 on a $ 3.5 billion business figure. A consensus calls for EPS of $ 3.52 on revenues of $ 3.43 billion.
In the last 12 months, Garmin shares have increased by 28.1%.
The biggest loser
CVS Health fell at the bottom of the index, as a result of disappointing forecasts for the entire year.
CVS Health lost $ 5.66, or 8.1%, to $ 64.22.
The pharmaceutical benefits manager and the pharmacy chain operator posted a better fourth quarter than expected, but the full-year forecast was weak, overshadowing the pace.
In the last 12 months, the CVS has decreased by 9.1%.
Write to Evie Liu at [email protected]