Yesterday, the Federal Reserve released a FOMC statement. They didn’t do anything with interest rates as everyone knew they would. However, they once again made the claim that “inflation is transitory” – meaning that even though the CPI hit an annualized 2.6% growth on its last print they are claiming that it is “transitory” as a way to be able not to have to do anything about it.
Of course, companies themselves are not acting like it is. In fact, Proctor and Gamble announced last week that they would raise prices on various consumer goods this Fall. So, they obviously don’t see inflation going away this summer if they are going to do that. Wolfstreet had a good article about how companies are talking about inflation on their earnings conference calls you can find here.
The US dollar index tanked after the FOMC release as you can see from this chart of the ETF that tracks it.
The US dollar index has already given up more than half of the gains it made year to date following its New Years rally/bounce that peaked out at the end of March.
Commodities across the board also rallied as you can see from the GCC ETF, which I have a small position in.
Energy stocks also had a sharp rally as you can see from the XLE ETF, which I have in my IRA.
Several energy stocks made new highs on Wednesday and the day also brought nice gains to shipping stocks.
However, it is gold and silver I’m watching now for a breakout soon. Gold is inching up towards that $1800 level and many mining stocks look ready to move. Take a look at HL.
I own HL and also have a position now in the coffee ETF JO. It went up 0.43% yesterday. I talked about it in this video I did earlier this week in case you missed it.
To learn more about my trading methods grab my book Strategic Stock Trading.
-Mike
