Few people possess the heavy-weighted power to move the markets. It almost seems impossible – how can the fate of thousands of companies, billions of shares, trillions of dollars (maybe more…) rest in the hands of a few short words that roll off the tongue? Few people indeed possess this ability, but when they speak, the markets listen – and they sure did last week.
We began the week after a short weekend rally on economic optimism coming off Black Friday spending. SPY opened on Monday at 265.78 and climbed to the mid-267’s on strong results from tech, retail and banking stocks. Gains for healthcare and telecoms in addition to Amazon’s announcement of record breaking sales into Cyber Monday pulled SPY up another dollar on Tuesday.
Federal Reserve Chairman Powell spoke at noon on Wednesday of a strong US economy and very clearly indicated that it is not the Fed’s policy to continue increasing interest rates but that it will review economic and financial data carefully before future rate hikes are considered. This was the big news item of the week and SPY shot up, closing five dollars higher.
If Powell’s statements weren’t enough to bolster bullish enthusiasm, news that the US and China were eager to get negotiating a new trade deal added fuel to the fire. Not unexpectedly, SPY rose again Thursday and continued optimistically on Friday, ending the week in the high 275’s.
All in all, we saw first hand the impacts of a few short words out of the mouth of a market influencer. Last week, Fed Chairman Powell rallied the hopes of investors and singlehandedly created immeasurable value.