Heading into this week’s trading activity, investors had one thing on their minds: The Federal Reserve and its latest meeting on interest rates. Over the last few weeks, trade issues, dwindling economic growth, rising unemployment and a host of other cracks have begun to show up both in the U.S. and the global economy. And because of that, expectations for the Fed to cut rates were rising high. The Fed did manage to deliver the quarter-percent rate cut that the market was looking for, which helped send stocks higher on the week.
However, it wasn’t all rosy for traders. Several pieces of bad news hit the airwaves this week, including a drone strike on a major Saudi Arabian oil refinery as well as trouble in the overnight REPO market. While the Fed was able to calm the repo issues with a few injections of liquidity, the strikes in Saudi Arabia managed to cause a spike in oil prices and keep stocks lower throughout the week.
With the Fed reporting its rate decision, there wasn’t much data. The same could be said for earnings this week. As the season begins to officially wind down, only a handful of bellwethers reported. Here again, they followed the same pattern of beating estimates but showing caution for the moves ahead.
All in all, the market hit a few bumps this week, but the Fed still managed to keep the good times going – albeit, at a lower level.
Be sure to check out our previous Wrap here, where traders were treated to better times.
