Investing.com - Financial Markets Worldwide

Post-Fed Fallout

Published 03/14/2012, 03:40 AM
Updated 07/09/2023, 06:31 AM

It was a day for the record books.  The market rallied into the Fed announcement, and then following the results, powered up further to add another 10 points on the S&P, despite a rather neutral Fed statement.

Conventional wisdom has it that the Fed stress tests were the driver.  Due to an alledged miscommunication between JP Morgan and the Fed, JPM announced the results of their test early.  Financial stocks got one whiff of the JPM story and shot higher.  Bank stocks finished up nearly 5% on the day, while the broader XLF financial ETF ended up just shy of 4%.

What will become of the upmove?  It's hard to say.  Looking at the charts, it's hard to imagine the rally rolling over and reversing, but then, stranger things have happened.  Much will depend on the economic data over the next days and weeks.  So far the news has been rather positive and supportive, and the market has done a very good job of discounting the news as it is released.  By some measures the market is ahead of itself.  If so, the market will need financial overperformance to justify a move to higher ground. Time will tell. It's hard to buck a strong uptrend, but the market is looking long in the tooth.

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