Dovish Janet Delivers

Friends

Fed Chair Janet Yellen spoke before the Economic Club of New York today and delivered the goods for those who were hoping for a more dovish stance from the Fed. Despite some hawkish comments from Regional Fed Officials over the past week or two, Ms. Yellen laid out the idea of a more deliberate path to rate increases and pointed to global growth concerns (as was the reasoning last September). Like Pavlov’s dog, traders displayed the expected response sending stocks higher as bulls piled on while bears looked for/to cover.

After early losses, by the close the market averages were sporting healthy gains. For the day, the Dow Jones Industrial Average was up 97 points to close at 17,633. The S&P 500 was up 17 points to finish the day at 2055. Gold was up $19 to trade at $1,239 per ounce, while oil was down $.92 to trade at $38.47 per barrel WTI.

The Fed, being data dependent, and market participants will now turn their attention to the employment picture, and that will be front and center over the next few days. Private payroll, weekly claims and the government non-farm payroll number are all on deck. Keep an eye on the average hourly wage number in Friday’s report. Remember, the Fed is achingly hoping to get that inflation rate up to 2%. Wage pressure would help. We have seen very gradual gains in that area over the past year, but not enough to move the needle. The Fed Chair backed off the hawkish tones of the past couple of weeks in her comments today. Let’s see if the data continues to confirm her concerns.

Have a nice evening everyone.

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