Stocks have rallied since Thanksgiving, making normally ungrateful traders count their blessings.
They’re most thankful for Federal Reserve Chairman Jay Powell, who brought Santa Claus early to Wall Street Wednesday with a highly anticipated appearance before the Economic Club of New York.
The previous month, Powell had said the current federal funds rate (now between 1.75% and 2%) was “a long way” from neutral, meaning investors should count on several rate hikes ahead. Wall Street freaked out and stocks tanked, also buffeted by fears over the midterm elections and continued trade battles with China.
But when on Wednesday Powell walked back that remark (or, by some interpretations, “cleaned up” his previous language) and said fed funds was “just below” the neutral level, stocks soared. The Dow Jones Industrial Average jumped more than 600 points Wednesday and is up almost 1,250 points since last Friday’s close, while the S&P has risen nearly 5% and the Nasdaq has done even better.
But whether this lasts and becomes a true Santa Claus rally depends on what happens in Buenos Aires, Argentina this weekend.