Major averages exhibited the usual volatility following the Fed's monthly policy announcement, struggling to find direction before closing down on the day. Volume was mixed with the S&P 500 logging another distribution day while the NASDAQ traded lower volume. The Market Direction Model went to a sell signal on Tuesday, but the market's upside reaction on the Fed maintaining its position pushed the MDM back into a buy signal yesterday. Volatility may continue to rule the day.
As for the Fed's decision, the ten Fed officials were unanimous in voting to keep rates in at a record low range of 0 to 0.25%, where they have been since December 2008. The Federal Reserve on Wednesday maintained an optimistic tone about economy despite the weak first quarter, as they have done many times before. After all, they have to keep up appearances.
“Although growth in output and employment slowed during the first quarter, the committee continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the committee judges consistent with its dual mandate,” the official Federal Reserve statement said.
This is consistent with Fed Chairwoman Janet Yellen's intention to be data-dependent in deciding when to raise interest rates. Meanwhile the Fed eliminated any reference to a possible date when they might eventually raise interest rates, leaving the door open to "data dependence."
Drug maker Valeant Pharmaceuticals (VRX) had a pocket pivot. Earnings and sales are accelerating, pretax margin 35.7%, ROE 54.6%, group rank 14.
Lighting products manufacturer Acuity Brands (AYI) had a pocket pivot. Earnings are accelerating, group rank 17.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.