The Feds gave us all an early Christmas gift today. What the half point cut means is that the markets can now make new highs again, and last time the feds cut rates, we all remember what happened. (Nasdaq 5000)
Sure it took time to get there, but it did. I look for the markets to continue their rise, and I look for Nasdaq 3000 and Rmbs 50 by year end.
I share your enthusiasm but not that way. The rate cut is good to help clear the mess in the mortgage and housing. But remember it is not all gravy. The dollar is getting weaker and the oil and commodity prices are going up This may invite inflation. Our local companies are happy with teh weak dollar but we import more than we export, it means higher prices for foreign goods. Even teh current prices for teh stock I wonder if that move is sustainable. We have to wait and see. As for RMBS, 50.00 is music to my ears.
You are right about the oil and the dollar, but like all other bubbles, they too will come back down to earth and wind up where they belong.
The markets have a mind of their own. Oil has been steadily climbing and the stock markets have shrugged it off. Even with oil at 80 and before the rate cut, the dow was only about 2 1/2 percent off its highs.
As for the inflation issue, when cpi and ppi numbers come out they are followed by the feds without the energy component baked into it, so even if oil hits 100 per barrel, that won't lead to inflation since that is factored out of the equasion.
The value of the dollar issue has been an issue for over a year already, and the dow hit its high even with a very week dollar, so that too seems to play no part in the markets. Bottom line is that the markets are now free to move much higher knowing that the fed is on its side.