Federal Reserve Chairman Powell spoke before Congress today and hinted that a rate cut was possible in July due to economic risks outside of the United States. The news sent markets higher along with the price of gold which jumped back above $1,400 an ounce. At the close the Dow was up 76 points to 26,860. Trading volume was heavy. The S&P 500 index today hit the 3,000 level for the first time ever.
Earnings reports are getting underway and banks are expected to show the highest net income growth of all the sectors which comprise the S&P 500 Index. Analyst are expecting an overall decline in year over year earnings this quarter but with a possible interest rate cut in the cards stocks in the US continue to trade near highs. Brian Wesbury, economist at First Trust in Chicago and honorary member of the Westport Mafia recently upped his yearend target for the index from 3,100 to 3,250 and set the Dow yearend target at 29,250 which is about 6% higher than the current level. Brian thinks profits, low interest rates, low inflation and a strong consumer justify the call.
Crude oil prices jumped 3% thanks to a larger than expected drop in US crude oil stockpiles. The gurus had expected a drawdown of 3.08 million barrels, but the actual figure was over 9 million barrels. Adding to upside price pressure was storm activity in the Gulf of Mexico causing US producers to curtail operations on some platforms. Overall US oil companies increased production to near record highs at 12.3 million barrels per day. WTI crude ended the day up 3.2% at $59.69.
Troop 100 is having a fine time at summer camp. There is a total of 56 lunkheads at camp this year. Hopefully, they won’t destroy the place. Here is a Facebook page link for the Troop.