Claire HunteThe indices all advanced as the Federal Reserve released its minutes from its May meeting, which signalled a rate hike could be in the offing. The Dow hit 21,000 in early afternoon but dropped back to 20,994 a gain of 0.27% at close. NASDAQ rose 24.31 points to 6,163.02 and S&P 500 also had a record day gaining +0.25%.
Investors piled into the more bearish sectors of real estate and utilities, which pushed the indices higher.
Experts say investors view a hike in interest as a vote of confidence in the US economy. The minutes released from the Fed point to a gradual and supportive stance and stated:
“Members expected that economic conditions would evolve in a manner that would warrant gradual increases in the federal funds rate."
Further adding, "Members agreed that the federal funds rate was likely to remain, for some time, below levels that they expected to prevail in the longer run. However, the…federal funds rate will depend on the economic outlook as informed by incoming data.”
- Dow 20,994 +0.27%
- S&P 500 2,404.39 +0.25%
- NASDAQ 6,163.02 +0.4%
- Russell 2000 1377.14 0.72%
- NYSE Composite 11585.21 +0.37%
- Gold 1,252.55 -0.6%
- Oil WTI 51.22 -0.72%
Oil barrels (Source: Shutterstock.com)OPEC boxed in?
Oil is performing slightly weaker after a period of higher prices but focus is shifting to OPEC’s meeting tomorrow and the wide expectation of extending production cuts.
Bank of America’s Francisco Blanch said on Bloomberg that OPEC “had boxed itself in” and it has been telegraphing [a cut] now for weeks.” He also said it was clear that “OPEC cannot control the price anymore.”
The market would expect either a six-month or nine-month extension. Blanch said that six months would be disappointing but a nine-month extension would give “a little more support to the price.”
