Elliott Wave Options: Bulls Don’t Care About Fed Delays … S&P 5,000 Target
For the past few months, stocks have been in an uptrend. The narrative has been around the fact that the Federal Reserve stopped raising interest rates. In late 2023, the central bank even stopped hinting at further rate increases.
Since then, investors have turned to the idea of interest rate cuts. However, the Fed has still continued with its “higher for longer” mantra. However, investors haven’t cared.
That leaves stocks trending higher. And that trend has held up well. The economy has also held up well. Economic growth remains strong. Unemployment has ticked up, but is still historically low. Inflation is declining, particularly producer price inflation.
Overall, it’s a solid picture. However, it’s not weak enough for the Federal Reserve to think about cutting interest rates anytime soon.
Even the news of layoffs at big tech companies sounds similar to last year. And tech stocks did well last year, even as they cut staff overall.
For now, that suggests that stocks will trend higher, even with the S&P 500 index hitting 5,000. And investors are rethinking the idea of interest rate cuts as early as March. They now may not even happen in the first half of the year.
Typically, the Fed doesn’t get to choose when it cuts interest rates. Market conditions will tend to for the Fed’s hand one way or another. So investors should remain bullish, as long as interest rates can stay where they are.