Stocks rallied today despite a disappointing earnings report from Apple and a weak Durable Goods number. Today marks the beginning of the last FOMC meeting that Dr. Bernanke will chair as he turns over the reins to Janet Yellen. We’ll find out tomorrow whether there will be any addition or subtraction to the tapering plans. Speaking of tapering, most of the turmoil in emerging markets is being attributed to the Fed’s tapering process. The liquidity that found its way to these emerging markets is beginning to be reduced, thus most affecting these emerging countries. Nevertheless, stocks staged a nice rally today.
By the close, the Dow Jones Industrial Average was up 90 points to finish the day at 15,928. The S&P 500 was up 10 points to close at 1792. Gold was down $8 to trade at $1254 per ounce, while oil was up $1.53 to trade at $97.25 per barrel WTI.
About tonight’s state of the union address. Evidently “inequality” is going to be the theme, which is ironic because the wealth gap has only widened during this administration. Perhaps the President should have leaned on Dr. Bernanke some over the past several years, for the Fed’s easy money policies have made the rich even richer, while the middle class has suffered from stagnant incomes, higher costs and zero interest rates on the little savings that they do have. The Fed’s policies made stock prices go up, which in turn enriched those who own stocks (the top 5%) but has done little to encourage employment or wage growth. Indeed, the gap has been widening for some time now between the haves and the have nots, but the policies that this administration have supported have only helped widen that gap. Just a thought.
Anyway, enjoy the state of the union address tonight and stay warm.