The daily Blips have been affected by my being out of office at meetings. We should be back on track going forward.
Over the past few days the markets have seen continued divergence as the Dow “value stocks” like banks and healthcare have gained ground while growth and tech related stocks have been stalling out. At the close today the Dow was off 14 points to 21,359 on lighter trading volume.
China Aircraft Leasing is buying 50 Boeing 737 MAX jets for about $5.8 billion list price. Shares of Boeing were up on the news. CAL is looking to expand its portfolio of aircraft and the 737 MAX is a “must own” commodity. I wondered if they ordered them on Amazon.
The Federal Reserve yesterday voted to increase interest rates by 0.25% to a target range of 1% to 1.25%. The Feds also penciled in a rate hike for some time later this year and the gurus are thinking it might happen in September. Regarding the economy, the Fed is forecasting slightly better numbers and is also seeing lower inflation and less risk from a global “black swan” event that could disrupt US GDP growth. Fed Chair Janet Yellen announced that they will start reducing the size of the balance sheet by letting bonds picked up during the crisis mature and bleed off instead of being reinvested. This plan will start in a few months and gradually ramp up to $50 billion per month unless events dictate a change in policy. The rate hike news drove the US dollar up which caused gold the fall hard. Gold ended the day off $19.40 an ounce to $1,256.