Gold

The brass ring is certainly within reach as the Dow inches closer to 20,000. US equities continue to gain tremendous value, today coming within 13 points of that elusive number on an intraday basis.

With the Christmas holiday, just days away, and New Year’s just around the corner, I am amazed at how quickly this year has passed. I am even more amazed at the events that have unfolded over this last year. 2016 is turning out to be not only a transitional year, but also a transformative year.

This week, traders and investors certainly had a multitude of new stories to focus upon. They also have a lot to digest when it comes to how these events will affect the markets. Today’s announcement that China had seized a US drone in international waters and the information about Russian hacking to affect last month’s presidential election and the final FOMC meeting were at the forefront.

Yesterday’s statements made by the Federal Reserve are just beginning to be processed by traders and investors. The immediate knee-jerk reaction and response has now dissipated.

The Federal Reserve’s final FOMC meeting for 2016 concluded today. In a largely anticipated move, the Fed announced an interest rate hike of 25 basis points (.25%). This rate hike accompanied statements containing their new economic forecasts.

In an astonishing combination of unrelated events, tomorrow’s Federal Reserve decision could be the final impetus that motivates traders to push the Dow Jones Industrial Average above 20,000 for the first time in history. 

For the last time in 2016, the Federal Reserve will meet for their regularly scheduled FOMC meeting. Although it is not etched in stone, it is highly anticipated that there will be an interest rate hike announcement immediately following the conclusion of their meeting on Wednesday.

US equities continued to gain value throughout the week, trading to new record highs almost on a daily basis. A revitalized optimism and strong economic data fueled one of the most robust rallies in US history. According to Bloomberg News, consumer sentiment is at its highest point since January 2015.

As we spoke about yesterday, there is truly a divergence between the actions and the policies of the Federal Reserve and the European Central Bank. This chasm continues to widen.  Whereas the United States is currently winding down its monetary stimulus program, the ECB is initiating new rounds of quantitative easing.

The US equities markets, which began to rally immediately following the US presidential election held last month, continue to rise. Today, we witnessed the return of the equity bulls, resulting in a new, all-time record high close for both the Dow Jones Industrial Average and the Standard & Poor’s 500.