Stocks Fluctuate, but End Day Up
By Laif Meidell, CMT, president of American Wealth Management, and portfolio manager of the AdvisorShares Meidell Tactical Advantage ETF (MATH)
U.S. stocks moved higher following the opening bell but made a couple of trips into the red before deciding to settle in the green, with the Standard & Poor’s 500 closing 0.27 percent higher on the day. After an hour into trading, some stock indices had given back all of their gains and then some, following the Energy Information Administration’s petroleum report, which reported a 10.9 million-barrel buildup in oil inventories over the week. This was much larger than the 4.8 million-barrel build that analysts had expected, and lifts crude oil inventors to another 80-year high of 482.4 million barrels. The S&P GSCI Crude Oil index fell 6.06 percent on Wednesday following the news.
Although stocks recovered from the early shakeout following the oil inventory data, the release of the FOMC minutes later in the day once again sent some investors to the sidelines as the Fed minutes showed a division between Fed officials for when the next rate hike should take place. The minutes revealed that the Fed is clearly focusing on the data to determine their next move, with wage growth an important factor in the Feds decision model. Depending on the data, the opinions on when the first interest rate could take place vary from as early as June of this year to late in 2016.
Following the FOMC announcement, the stock market mounted and advance to close the day in the green. However, the big winners on the day were foreign stocks, with the FTSE China 50 index gaining 6.15 percent on the day. For the week, the top-performing countries were emerging markets, namely Russia, China and Brazil. The Market Vectors Russia index rose 11.97 percent over the past five trading days, followed by the FTSE China 50 index, up 10.85 percent, and the MSCI Brazil Capped index, higher by 9.24 percent over the same period.
This commentary originally published in the Reno Gazette-Journal. Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate.