On a day when Federal Reserve chair Jerome Powell warned that the U.S. economy recovery, while faster than expected, could stall if Congress didn't pass new fiscal stimulus measures to make up for the effects of the coronavirus pandemic, on Twitter President Donald Trump urged legislators to pass a massive stimulus bill with numbers much higher than in the $300 billion bill proposed by the Republican Senate. How much larger? No one has the slightest idea.
At 2:30 p.m. New York time, about the time the Federal Reserve issued its press statement on today's meeting of the Fed's interest rate setting body the Open Market Committee and about the time when Fed chair Jerome Powell issued his comments on the meeting, stocks were up. The Standard & Poor's 500 was ahead 0.63% and the Dow Jones Industrial Average had gained 1.11%. Tech stocks were struggling with the NASDAQ Composite off 0.09% but overseas equities were moving ahead with the iShares MSCI Emerging Markets ETF up 0.44%. The Russell 2000 small cap index had pushed higher by 2.07%. The market had, at that point clearly heard something it liked from the Fed. Powell gave the central bank's first take on interest rates in 2023, saying that the Fed would keep interest rates low through that year--at least. And the Fed also got decidedly more optimistic on the economy. In their dot-plot Federal Reserve officials predicted that unemployment will fall to 7.6 percent by the end of 2020, and to 5.5% by the end of 2021. By 2023 the Fed's projections put unemployment back at 4%, pretty much where it had been before the coronavirus recession. “The recovery has progressed more quickly than generally expected. Even so, overall activity remains well below, and the path ahead remains highly uncertain," Powell said at this afternoon's news conference. By the close, though, the market was having second thoughts
Long-delayed performance report for Jubak Picks Portfolio–total return 10.2% in 2018 and 10.2% in 2019
When is a 10.2% total return good? When, as in 2018, it beats the 4.56% loss on the S&P 500. And when is a 10.2% total return bad? When, as in 2019, it trails the 31.29% total return for the S&P 500.