Major market averages were up on lower volume yesterday for a second day as the indexes keyed off of the S&P 500's test and bounce off of its 50-day moving average. Markets have a tendency to tiptoe higher on lighter volume after major floors are reached in this quantitative easing environment. But this time around, damage done to leaders has been the most pronounced since January 2013, so odds favor a continuation of the correction. That said, the “dot plot” showed the Fed’s median forecast of the fed funds rate rose by a quarter of one percentage point to 1% for 2015 and by a half a percentage point to 2.25% by the end of 2016. Thus this unusually dovish report favors QE as being here to stay for a prolonged period which may help markets put in a floor sooner than later.
MLR - PMP 4/10/14
| Published: | 10 Apr 2014 12:39 ET |
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