Market Alert - FOMC Minutes

Fed sticks with its 'gradual approach' to 'further' rate hikes as the economy has grown faster than its forecasts. That growth 'affirms' the Fed's 'gradual approach.' Moreover, its gradual approach would help the economy continue its growth.

Interestingly the FOMC says it does not see growth attributable to the tax cuts though the kind of reform implemented is the kind that leads to investment that leads to economic growth down the road. That is why the tax cuts were for the most part good tax cuts.

Fed Minutes say there are few signs of any wage growth, a positive for keeping the rate hikes the same. On the other hand, the Fed spent a lot of time talking about inflation, so therefore it is the area the Fed is watching.

The market hit session highs midmorning and held them into the FOMC. Stocks jumped higher on the FOMC minutes, hitting a session high in the first bar, hesitated some, Now breaking higher again. Don't see anything really market derailing, and overall it is dovish enough to keep the bids present today. Even so, the elements the Fed is concerned about are showing up as seen in the Jobs Report, CPI, PPI.

SP500 27.66, 1.04%
NASDAQ 93.11, 1.30%
DJ30 261.91, 1.06%
SP400 1.24%
RUTX 1.33%
SOX 0.43%

As you can see, the move higher is very even across the indices.




Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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