Today the Federal Reserve announced that they would begin purchasing individual Corporate Bonds, on top of their current purchases of Bond ETFs. Needless to say, what had been a lower open, turned into a positive day for the markets as this Fed action continue to support the narrative of near limitless support for the financial markets.
As you can see, all equities, international or not, rallied after the Fed laid our their plan. US markets benefited much more, especially Small Caps and the Nasdaq. Needless to say the Small Cap factor outperformed other areas, along with Momentum stocks. Low Volatility and Value stocks benefited less today.
Needless to say, Bond markets quite liked this announcement, especially Junk Bonds buoyed by the fact that it would seem the Fed is willing venture in to lower quality issues to support the market. Also, such action also probably signals that a Fed rate hike is pretty far off, not that a delayed hike was necessarily ever in doubt.
As I mentioned yesterday JinkoSolar ($JKS) and Lennar ($LEN) reported today with opposite results; Lennar beat and helped drive home building up en-masse, while JinkoSolar missed and suffered accordingly. Lennar’s results seem to bode well for the housing sector, at least home builders, and their ability to weather the Covid storm.
Again, tomorrow we have Oracle ($ORCL) and Groupon ($GRPN) reporting, with Oracle being a tech bell-weather and Groupon being an insight into the consumer consumption world.
Fun Reading From Today
Zoom continue to soar Haiku
Thoughts on Money and the Modern Life
Letters from isolation
Thanks, and be well
Nathan
