How the Slow-Growing Market Reacted to the Federal Reserve’s Decision

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.
Federal Reserve Building

If you’ve ever been caught up in a case of really bad timing, then you probably know what the Fed is feeling right about now.

This morning, we received a dismal Gross Domestic Product (GDP) print that showed economic growth SLOWED to an adjusted annual rate of just 0.1% since the beginning of the year. That’s very, very poor, especially when you consider what the Fed just announced.

As expected, the Federal Open Market Committee (FOMC) opted to continue the “taper” of its current bond-buying program, announcing via the FOMC statement that it would reduce its monthly bond purchases to $45 billion from $55 billion. The decision was widely anticipated and the vote within the Fed was unanimous.

Now, the Fed did somewhat acknowledge the slow economic growth in a statement, acknowledging that recent data “indicates that growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions.”

Yes, when all else fails, blame the weather.

Of much more importance than the Fed’s statement today was the reaction, or virtual lack thereof, in the equity markets. After 30 minutes of post-FOMC announcement trade, the S&P 500 index was up only fractionally.

SPX_043014

The broad-based measure of the domestic market continues to trade well above its 50-day moving average and decisively above its 200-day moving average. Although this bull market may be tired, the technicals certainly suggest the bull is intact.

As for bonds, well, we saw more of what we’ve seen all year, i.e., we have seen bond yields fall and bond prices rise.

Exclusive  Cannabis Corner: Aurora Turns It Around

The benchmark 10-Year Treasury Note yield was down 1.4% after the first 30 minutes of post-FOMC statement trade, proving once again that the rising interest rates that most so-called experts thought would dominate the markets have failed to materialize this year.

TNX_043014

If you want to find out how to take advantage of what has been the biggest surprise in the market so far in 2014 — i.e., a stable interest rate environment — then I invite you to check out my Successful ETF Investing advisory service, today!

Sounding an Uplifting Alarm

I will never give in, until the day that I die
I’ll get myself some independence
Carve out a future with these two bare hands…

–Mike Peters, The Alarm

The lyrics here are from Mike Peters, singer/songwriter and founder of the United Kingdom-based alternative rock band The Alarm. Here the masterful Peters gives advice suited to all of us, and that is to always keep fighting for your values and to pursue the virtue of independence.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Making Money Alert readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

In case you missed it, I encourage you to read my e-letter article from last week about what the market’s comeback rally means for investors. I also invite you to comment in the space provided below.

previous article

Global stock markets settled into a narrow trading range over the past week. Both the Dow Jones and the S&P 500 ended the week essentially flat, while the tech-heavy NASDAQ fell 1.39%. The MCSI Emerging Markets Index ended the week down 0.53%. Big gainers in your Alpha Investor Letter portfolio included Berkshire Hathaway (BRK-B), up 1.05%, and the WisdomTree Japan SmallCap Dividend (DFJ), which rose 0.51% and moved back to a BUY. Both Ber

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE