Stocks Rally On Rate Cut Dreams

by Darren

Investor love rate cuts. Investors love rate cuts. Sorry, that was my attempt at insight into the minds of the Federal Reserve and investors. The Fed has continued to cut rates, and investors have continued to support the idea by continued purchase of equities.

“Anticipation of another Fed rate cut is the main magnet in the market today,” said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc.

With the Federal Funds rate heading to 0, it’s not likely these continued cuts will excite people. Or will they? So far the market has generally rallied behind any rate lowering, regardless of the specifics.

Housing numbers were again released today that were abysmal. New home sales were down 4.7% in December, and 26.4% down from the prior year.