Stocks Surge on Weaker Philly Fed Data
Stocks in the US got off to a positive start after Wednesday’s slide. The Fed minutes put taper talk back on the table as investors viewed the discussion about potential tapering as a sign that the Fed would consider reducing bond purchases prior to reaching optimal unemployment. The Fed is desperately trying to convince market participants that tapering and tightening are different, but bond traders will have not of it, pushing the 10-year yield above 2.80%. Mid-day the stock rally accelerated with the S&P 500 index closing higher by 14.5 points.
In other central bank news, the BOJ kept rates unchanged. Bank of Japan kept their accommodative policy unchanged as expected. The BOJ left its key interest rate at 0.1%, and maintained its program of expanding the monetary base at an annual rate of 60-70 trillion yen per year. Governor Haruhiko Kuroda said that the economy is moving at a moderate pace in line with forecasts.
In corporate news, Green Mountain (NASDAQ:GMCR) gains traction following its earnings beat. Green Mountain’s shares climbed 4.8% in early trade after the company’s fourth quarter results topped expectations, boosted by increased sales of the firm’s single-serve coffee packs and demand for its Keurig brewers. Net profit jumped 38% to $127 million as Green Mountain’s gross margin widened to 36% from 33.4%. Earnings per share came in at $0.89, and revenue grew 22% to $1 billion. After the closing bell gap released earnings that beat the street. The clothing company reported 72 cents per share compared to the 71 cents expected by analysts.
Technically the major indexes are solid. The Russell 2K rallied 1.8% as the MACD (moving average convergence divergence) generated a buy signal. The RSI moved higher with price action and is printing near 60 which is on the upper end of the neutral range.
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