We got another horrific weekly jobless claims number, but that was certainly expected. What was not expected was that the Federal Reserve found another kitchen sink to throw at the situation. Previously, the Fed committed billions, if not trillions of dollars to support government bonds, mortgage bonds, investment grade corporate bonds and money market funds. Today, they stepped up by pledging another $2.3 Trillion dollars to support the junk bond market and the municipal bond market. Basically, the Fed has stepped in to support everything but the stock market, and I wouldn’t be surprised if we head back down to new lows at some point that they would step in to buy stocks. Simply put, the Fed is really ALL IN.
Since the weekly jobless claims number wasn’t a surprise, and the Fed action was, it was the bullishness of the Fed action that helped move stocks higher. By the close, the Dow Jones Industrial Average was up 285 points to finish the day at 23,719. The S&P 500 was up 39 points to close at 2,789. Gold was up $45 to trade at $1,730 per ounce, while oil was down $1.63 to trade at$23.46 per barrel WTI.
It was a very good week for stocks. We still remain cautious because there is still so much that is unknown, but the good news is that the forced selling that we saw in March is likely behind us, and the Fed is a force to be reckoned with. Stocks have been able to recover about half of the first quarter losses and that, at least, has calmed things for the moment. Remember, the markets are closed for Good Friday tomorrow, so we’ll be back at it on Monday.
Happy Passover and Happy Easter to everyone. Have a great weekend.