1. Moving the markets

After sleeping on the Fed’s statement on interest rates, Wall Street traders decided that the Fed left the door somewhat open to a rate cut. As a result, expectations soared from 80% to 100% that the Fed will “cut” in July.

That was enough for the major indexes to gap higher at the opening with the S&P 500 setting a new intra-day all-time high in the process, while taking another giant step towards conquering its $3k milestone marker.

A mid-day dip did nothing but encourage more bulls to jump aboard this pause in upside momentum, and up we went notching new highs for the session prior to the close. Bond yields headed lower again, with the 10-year barely hanging on to the 2% level, although it dipped below it intra-day.

While most of the attention was on the Fed, it’s important to note that tomorrow is quadruple option expirations day, which can cause the markets to move violently in either direction prior to expiration time. I think a great deal of today’s upward ammo came from that looming deadline.

Also helping today’s bullish cause was a report that the warring parties in the U.S.-China trade dispute have decided to get together again, with the U.S. delegation traveling to Japan next week for “preliminary” meetings.

As I have posted before, the rise of the global money supply has been a terrific indicator as to the overall direction of equities. It has surged once again and has been a major contributor to rescuing the markets after the very destructive month of May, during which the S&P 500 lost -6.6%.

1. Moving the markets

One of the most eagerly watched events, namely the Fed’s verdict on interest rates, came and went without much of a market hiccup. A gentle early slide gave way to a modest bounce late in the session, with the major indexes notching another green close and moving within striking distance of taking out their old all-time highs.

The Fed decided to hold interest rates steady and motioned that it’s unlikely that they would cut borrowing costs for the remainder of the year. Of course, judging by their past actions, nothing is ever chiseled in stone, and they left themselves a little wiggle room by pronouncing to “closely monitor” inflation and growing “uncertainties.” The latter appeared to be a jab at the escalating trade tensions between the U.S. and China.

In other words, if things change, they may change their mind…

While the White House might not be too pleased with this outcome (Trump has been advocating an interest-rate cut for months), market reaction was kind of muted, but we did zig-zag higher after the Fed announcement.

Bond yields were the beneficiary, as yields dropped with the 10-year heading towards the 2.01 level, while the U.S. Dollar tumbled after the Fed released its statement.

Could the markets take off from here and push into record territory? For sure, “if” at the upcoming G-20 meeting in Japan, Trump and his Chinese counterpart Xi agree to a trade deal, or at least pronounce progress in negotiations. That should do the trick and give a boost to the major indexes.