Janet Yellen and her merry band of central bankers are hinting that the U.S. Federal Reserve won't increase interest rates in April, fueling a Dow Jones Industrial Average rally today. It's become increasingly clear that the central bank's chatter about four interest rate hikes in 2016 was little more than nonsense. Traders certainly never fell for it. The CME FedWatch projects just a 7% chance of a rate hike in April, and the probability of the next hike doesn't rise above 50% until December.
Here's what you need to know about the markets on Wednesday, March 30, 2016.
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
S&P 500: 2,063.95; +8.94; +0.44%
Nasdaq: 4,869.29; +22.67; +0.47%
Now, here's the top stock market news today...
In deal news, State Street Corp. (NYSE: STT) announced plans to purchase General Electric Co.'s (NYSE: GE) asset management division for up to $485 million. The deal will hike State Street's asset management levels by another $100 billion.
WTI crude oil prices started the day strongly in positive territory but retreated quickly on news U.S. crude inventory levels rose again to a new record. U.S. crude inventories increased by another 2.3 million barrels last week. Despite the gain, oil prices remained defiant as the build was less than what economists expected by roughly one million barrels.
On the economic front, the private sector added 200,000 jobs in March, according to Automated Data Processing. That's slightly lower than what economists had forecast, but is another strong showing for the U.S. economy. With the Fed in focus, investors will be keeping a close eye on the March jobs report, which will be released by the U.S. Labor Department on Friday.
Despite the positive figures in the U.S. economy, there was more bad news for the health of the global economy. The Organization for Economic Cooperation and Development - which represents the world's most advanced economies - lowered its forecast for global growth and warned about global governments' abilities to fulfill pensions and pay bondholders. The OECD lowered its 2016 outlook from 3.3% to 3%. That decline could reduce the amount of revenue collected by governments needed to pay debt holders and fund pensions.
But the big talk - as always these days - was on the Fed and the timing of the central bank's next interest rate hike. Markets around the globe rallied after Yellen's speech on Tuesday suggested another rate hike was not imminent in April. Even though the rally has been strong in recent weeks, traders on the floor are discussing the upcoming earnings season - which they see as the real test for the markets. Chicago Federal Reserve Bank President Charles Evans said inflation levels are too low to justify a rate hike.
Now, let's look at the day's biggest stock movers and today's must-own investment...
Negative Interest Rates Will Kill America's Free Market... Negative interest rates are the latest central bank "flavor of the month," and the fact that this disastrous policy hasn't worked in Europe - or anywhere - won't stop the Federal Reserve from taking NIRP for a spin in the United States. Now's your chance to gain immediate protection from the downside - and even position yourself to profit - when Team Yellen takes rates negative. Don't delay...
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.