Fed Minutes Roller Coaster Ride

Friends

We had some fireworks today while everyone was waiting for the 1:00 (our time) release of the FOMC minutes, Bloomberg “accidently” released the headlines about 20 minutes early. The minutes were mainly interpreted as slightly dovish (perhaps no rate hike in September) and stocks reversed what had been an awful 200 point Dow retreat. After climbing all the way back to positive territory, stocks fell again, led by the quickly collapsing energy sector. The aforementioned oil stocks are firmly in bear market territory (some may say “crash-like”).

By the close, the Dow Jones Industrial Average was down 162 points to finish the day at 17,348. The S&P 500 was down 17 points to close at 2079. Gold was up $15 to trade at $1132 per ounce, while oil was down $2.09 to trade at $40.53 per barrel WTI.

In addition to the Fed minutes we got the CPI number today and it was somewhat benign as expected. As the Fed looks to the September meeting, they could justify a liftoff on the employment side of the ledger, but will have difficulty giving the green light given the very modest inflation numbers. Again, the minutes seem to indicate that they could begin the tightening process in September, but many of the FOMC members seem to feel that there are enough reasons not to go. I guess we will see soon enough.

Have a nice evening everyone.

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