Market Lab Report - Premarket Pulse 4/28/16
Major markets finished mixed yesterday on higher volume with the NASDAQ Composite bouncing off its 200-day moving average and closing near the top of its trading range. Big cap technology stocks have taken a beating such as AAPL after its revenue disappointment and TWTR with its weak earnings report.
The Federal Reserve left rates unchanged. In an even-handed statement, the Fed noted "labor market conditions have improved further even as growth in economic activity appears to have slowed." The Fed said it expects U.S. growth to resume a more "moderate" pace and said it will continue to monitor domestic and global developments. The Fed moderated its previous expression of concern about the global economy, saying only that it was monitoring them. In March, it expressed concern these were areas of risk.
Markets rallied on the news though the change in language regarding the global economy implies a less dovish stance giving the Fed more room to hike rates in the future. Of course, should the global economy continue to struggle, any rate hikes would be later than sooner.
The Bank of Japan left rates unchanged Thursday, brushing aside calls for more stimulus from the markets. The subzero rates remain in place and went into effect in February as part of stepped-up efforts to spur growth. The central bank’s inaction comes despite a further deterioration in Japan’s economic landscape since the previous policy meeting held in the middle of March. Negative rates do not seem to be helping.
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