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FOMC Gooses Metals Versus Stocks for a Change

06-10-2020

In the lead up to Fed time, the market was mixed with the S&P and Dow slightly lower and the Nasdaq 0.75% higher. The Fed surprised no one by their meek verbiage, although it put a bid under the indices for a bit. They didn't get far, however, and closed below pre-Fed levels. Whether today’s "stall" by the market is a meaningful development, it is too early to tell.

Away from stocks, the pre-FOMC form saw green paper a bit weaker again, fixed income was higher, and the metals were higher with silver up 1.5% compared to just a fractional gain in gold (it had been almost 1% higher earlier but gave that up rather quickly).

If Only They Could Print Bootstraps After Powell’s extra dove-ish press conference (in which he once again incorrectly asserted that wealth "inequality is not related to monetary policy"), the dollar slipped more. It really looks weak (which probably means it will see a rally soon), but longer term, green paper seems to be in some trouble. Fixed income stayed bid while the metals quickly bolted higher, led by silver. It finished up 4% while gold added 1.5%.