Stocks Unimpressed With FOMC Decision; Dollar Dashed

The Fomc wrapped up a relatively uneventful meeting Wednesday, keeping rates unchanged and saying little to nothing about winding down the Fed's bloated balance sheet.

After two hikes already this year, rates will almost surely remain on hold until December and an announcement that the Federal Reserve is ready to shed assets may come at the September meeting, according to knowledgeable experts on the subject. Having been sufficiently prepped and prodded, the Fed can feel some confidence that a beginning of an asset unloading program won't upset the status quo too awfully much.

The one kicker is that the wildly out-of-control federal government faces a potentially debilitating debt ceiling debate and a testy budget process in September, but that will come only after congress has taken a month's vacation, pending Obamacare replace and/or repeal legislation currently under consideration in the Senate.

Nothing the Fed does can accurately predict what the paid lackeys... er, prostitutes, er, politicians will do when the rubber meets the road in terms of the soon-to-be $20 trillion national debt. Chances are good that they'll punt, laying one deep and long, giving themselves room to survive the midterm elections in 2018. One person who does not have to suffer any kind of electoral fate in that year is President Trump, who is almost certain to have boisterous opinions on the matter of the debt ceiling and federal government budget.

There are wild card outcomes which the Fed is unable to predict no matter how deep or thorough their modeling, which raises the possibility for abrupt changes in policy, and the jokers dealt by the government are not the only potential surprises. Geopolitics - specifically, North Korea, Ukraine, Iran, or Syria - may play a role in future policies, as could any number of scenarios, from ECB jump-starting their own tapering, Japan failing to follow through with continued buying of equities, or, perhaps a war between China and India stemming from border disputes in and near the Himalaya mountains. Go figure.

As far as stock movements and reactions to the FOMC nothing-burger issued today, the markets basically were held in suspended animation afterwards with a slight bias to the downside.

The outsize gains on the DJIA were largely the result of Boeing's (BA) monstrous 9.2% spike today (biggest day for BA since 10/28/08), responsible for 132 Dow points. So, essentially, the remainder of the Dow was lower, only lifted higher by the flighty airline manufacturer. Only 13 Dow components were higher, 17 lower, led down by Nike and McDonald's, the latter having made new all-time highs just yesterday, which is alarming, since what the company passes off for food has recently reached new lows. Must be their outstanding customer service or something else casual consumers just don't see or understand. Share of MCD are massively overpriced, with earnings per share of 6.25 and a stock price of roughly 156 translating to a P/E of 25. Shareholders and executives (neither of which actually eat at any of their own restaurants) are "loving' it."

The dollar got whiplashed lower, sending (alarm bells) gold and silver higher. Also on the run is the price of crude oil, as the latest reports showed a massive draw, though gasoline inventories were built. Once more, the people actually using the stuff - drivers - just don't get it, apparently.

At the Close, 7/26/17:
Dow: 21,711.01, +97.58 (0.45%)
NASDAQ: 6,422.75, +10.57 (0.16%)
S&P 500 2,477.83: 0.70 (0.03%)
NYSE Composite: 11,964.92, -0.80 (-0.01%)