April 30, 2008
The Fed Funds rate cut, more or less expected was announced today, but its 25 basis decline, failed to excite the market to move up.
Actually, todays reaction is not at all unusual; it is the tenth downturn for the DJIA and the S&P500 of the 19 rate cuts in this century occurring on the announcement date. The NASDAQ record is not much different, having only nine declines, but ten increases.
But the prospects for the day after are promising. The NASDAQ has moved higher twelve times on the day following the rate cut announcement, and fallen only six times. The other two indices follow the same pattern, but do not have as many advances, The S&P500 increased tem times, and fallen eight times on the day after the Fed rate cut announcement, while the DJIA has an even response, falling nine times and also gaining nine times.
DJIA -.09 percent
NASDAQ -.55 percent
S&P500 -.39 percent