Apparently Yellen strummed the lute just right, or at least got it close enough. Stocks gave up the early gains heading into her prepared remarks, held the line, then bounced back and forth in a 3 hour range. over the past 1.5 hours, however, stocks rallied base the morning highs, pushing most indices positive with the large cap NYSE leading. Not the best leadership because those leading are more of the defensive names.
SP500 6.09, 0.29%
NASDAQ 2.89, 0.09%
DJ30 38.49, 0.23%
SP400 -0.02%
RUTX -0.24%
SOX 0.29%
What Yellen said.
Yellen fine tuned her position according to some. To us it appears she switched her 'if/then' position once more, suddenly not as confident of the future. Yellen said that the Fed will have to see if the recent labor weakness is truly transitory (another way of saying she just doesn't know). That fed into the key point: the FOMC is looking for whether, no when, the economy would show a clear sign of improving. Gee, I thought the Fed was already there. Apparently not.
Even with the big NYSE indices moving more, some of the same groups continue to work. Oil stocks have reversed early weakness and are moving positive. Still, it is a back and forth day and as stocks rose to new session highs the sellers are stepping in to give it a shot.
Appears to be one of those times the information has to get digested as the action is back and forth while investors try to figure out the moving target that is the FOMC as well as the Brexit issue.
We are watching how the market plays out in this last hour. Biotechs and drugs are somewhat weaker so watching those. Other than that, we will see if oil can hold the recovery and bring others sectors along with it.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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