Good morning and Happy Friday!
Markets are consolidating after a strong relief rally. It seems that the China contagion fears and the announcement of a soft taper from Fed seemed to have calmed investors and traders. However, there are still uncertainties out there. Bond rates have moved higher after the Fed announcement and that will help reduce some of the inflation fears but it may shift dollars from stock to bonds. As long as bond rates stay lower than stock dividend rates, most of the capital will most likely stay in stocks. What will be really important is how earnings will fair since many firms have communicated that input costs and supply disruptions may hurt earnings. But CEOs are very skilled at positioning themselves to always come out ahead. This time it will probably be the same. Enjoy your weekend!!
Talk soon,
Al Losada
Founder | SimpleOptionStrategies.com
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