Fed Cuts Rates, S&P Hits New All-Time High

Plus New Zacks Strong Buys for Thursday, October 31

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Fed Cuts Rates, S&P Hits New All-Time High Stocks closed higher yesterday with the S&P making another new all-time high after the Fed lowered interest rates as expected. The markets spent much of the day on the defensive, but then turned around when the Fed announced they cut interest rates by another quarter point for the 3rd time this year. Also as expected, they indicated they would pause from cutting rates further unless there was a marked slowdown. Their policy statement reflected this change by replacing their previous phrase of "act as appropriate" to sustain the economic expansion, with the new one that states they will "continue to monitor the implications of upcoming information for the economic outlook." Fed Chair Jerome Powell underscored that sentiment by saying, "we believe monetary policy is in a good place", and cited the upbeat economic outlook, the strong labor market, solid consumer spending, and the anticipated signing of phase one of the U.S.-China trade deal for their reasoning. But he was quick to reiterate that if those things were to change, "we would respond accordingly." Stocks rallied on the news, as they should. This also came on the heels of yesterday morning's better than expected Q3 GDP report which showed the economy grew at 1.9% vs. the consensus for 'just' 1.7%. The U.S. economy is in a great place right now. And so is the market. This is history in the making. And don't let the new highs spook you. Because stocks making new highs have a tendency of making even higher highs. In fact, studies have shown that stocks typically go up in the subsequent six months following new all-time highs. And I'm expecting a lot more upside to go. 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