September 17, 2020
Another mixed day on Wall Street yesterday, saw the Dow as the only winner of the day gaining 36.78 points, or +0.13%. Technology and many COVID-recovery related stocks led the NASDAQ and S&P 500 lower, dropping 139.86 and 15.71 points, or -1.25% and -0.46%, respectively.
On the release of the policy statement by the Federal Reserve yesterday, all three major stock indices immediately sank. “With inflation running persistently below this longer run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that the inflation averages 2% over time,” the Federal Open Market Committee said in a statement. In Chairman Jerome’s news conference, “We expect to maintain an accommodative stance of monetary policy until these outcomes, including maximum employment, are achieved.”
Fed officials upgraded their economic projections for the year, and now anticipate a shallower decline in real GDP and a lower unemployment rate by year-end relative to their early-summer projections.
The markets look to open sharply lower this morning as concerns over the likelihood of an economic recovery anytime soon without additional fiscal stimulus weigh heavily on investors. Today’s release of the weekly initial jobless claims did not help, indicating 860,000 new claims last week when 850,000 were expected. The recovery of the U.S. economy appears to lie in the balance between the lifting of business restrictions and public health safety.