Fed Minutes Put March Rate Hike In Play

Editor's Note: With the luck of some extremely mild weather in Upstate New York (temps in the 60s today and expected the same for Thursday and Friday), the Money Daily team (Fearless Rick) has headed out to open up spring and summer camp a little early. That means the usual posting of Money Daily will not be the normal after the market close summary, but will be more sporadic for probably the next three to four weeks and may not be "daily" at all. Better weather brings on more responsibilities and a relaxed time frame.

Thanks,
Fearless Rick

Let's not beat around the bush. The Federal Reserve is intent on raising rates, which should surprise nobody, as the federal funds rate has been at or below one percent for the better part of 16 years.

Currently set at 0.50-0.75%, the key overnight rate has been largely responsible for a great deal of irresponsibility, not the least of which was the subprime disaster of 2008 and the resultant Great Financial Crisis which sent the global economy into one of the worst tailspins since the Great Depression of 1929-1938.

So, with the release today of the minutes from last month's FOMC meeting, it's compelling to think that a rate increase would be on the agenda at the next meeting, mid-March.

After all, the latest hike, in December of last year, hardly caused a ripple at all. Most experienced investors and money managers are aware of the need to "normalize" policy by the Fed and have preparing for such an event (or series of hikes, which is completely probable) since December of 2015.

With President Trump promising a fiscal stimulus plan, the Fed's belief that inflation will be the end result is a bit of a cockeyed argument, but, as always, the hyper-politicized Federal Reserve Board of Governors will say anything to get to their desired result. If the hikes come too quickly - they promised four this year - they can lay the blame on everybody's favorite political punching bag, Mr. Trump. Should things work out, the Fed will claim all the credit for "saving the financial system as we know it."

Either way, the Fed will come out smelling like the proverbial rose, even though they come closer to the stench of burning paper currency than that of a pretty flower.

March is now a "live" month for the Fed, though it should not go unnoticed that the Fed has and will likely continue to do not what they say, as in the case of last year's promise of three rate hikes, when in fact they actually performed just one (December).

With the stock indices hitting all-time highs on just about a daily basis, March would be as good a time as any to get rates another notch closer to one percent. In fact, a 50 basis point hike, to 1.00-1.25% wouldn't be such a bad idea. The stock markets are about to go belly up, despite being wildly overvalued.

Wall Street suffers from the absolute worst form of normalcy bias and that alone should prevent even a correction. Financial markets are in as weird a place as they've ever been, but expect the next crashing sounds to come from overseas, either to the West, as in Japan (or even China), or looking East at the failed experiment that is the European Union and the coming parity of the euro to the US dollar.

Stocks Ramp To All-Time Highs Again

More record closes for all major US indices.

At The Close, 2/21/17:
Dow: 20,743.00, +118.95 (0.58%)
NASDAQ: 5,865.95, +27.37 (0.47%)
S&P 500: 2,365.38, +14.22 (0.60%)
NYSE Composite: 11,578.25, +67.34 (0.59%)

Big Week For Equities Sends All US Indices To All-Time Highs

Stocks suffered early in the day on Friday, but rallied late with the Dow, S&P 500, and NASDAQ all closing with marginal gains. Only the NYSE Composite ended the day in the red, down about a point-and-a-half.

Even with options expiry, Friday was barely exciting, but, for the week, the US averages were, in a word, incredible.

The closing figures for the day and week are presented below. More analysis (if any is even necessary) Saturday AM.

At the Close, Friday, February 17, 2017:
Dow: 20,624.05, +4.28 (0.02%)
NASDAQ: 5,838.58, +23.68 (0.41%)
S&P 500: 2,351.16, +3.94 (0.17%)
NYSE COMPOSITE: 11,502.71, -1.48 (-0.01%)

For the week:
Dow: +354.68 (1.75%)
NASDAQ: +104.45 (1.82%)
S&P 500: +35.06 (1.51%)
NYSE COMPOSITE: +133.19 (1.17%)

OMG! Only Dow Closes At New All-Time High

Stocks took a needed breather on Thursday, staring at a Friday options expiry tomorrow which should be a massive payday for the Bulls, which, we assume would be everybody.

Gosh, this is getting repetitive and boring.

At the Close 2.16.17:
Dow: 20,619.77, +7.91 (0.04%)
NASDAQ: 5,814.90, -4.54 (-0.08%)
S&P 500: 2,347.22, -2.03 (-0.09%)
NYSE Composite: 11,504.20, -10.20 (-0.09%)

Four Straight: All Major US Indices Close At Record Highs

Shades of the Weimar Republic, as all financial assets are becoming ridiculously overpriced.

As was the case in the Weimar, this may not end well. Inflation statistics from this morning's CPI reading showed January up 0.6% and the core CPI higher by some 0.3%. Meanwhile, capacity utilization fell 0.3 from December, to 75.3%.

Retail sales figures were also positive, showing a gain of 0.4%, after December's numbers were magically improved, revised from 0.6% to 1.0%. This as holiday sales gains from major retailers were modest or unreported, and large chains such as Sears and Macy's announced mass store closings coming throughout the year.

Global stock indices have also been ramping higher of late, an indication that the inflation, so often promised by endless rounds of quantitative easing (money printing) and an extended period (8 to 15 years) of low interest rates (some below zero) is finally occurring. What the globalists have been touting and predicting to happen can only lead to one logical conclusion: higher prices for consumers, a condition that will prove to impoverish the average citizenry of nearly every country in the world.

All of this may have something to do with the globalists running scared that their era of "free trade" and fiat money is about to meet its logical conclusion.

But it's all good for Wall Street, and that's what counts, to Wall Street.

At the Close, 2/15/17:
Dow: 20,618.98, +114.57 (0.56%)
NASDAQ: 5,821.62, +39.05 (0.68%)
S&P 500: 2,351.15, +13.57 (0.58%)
NYSE Composite: 11,510.34, +41.47 (0.36%)