Benzinga - by Aaron Bry, Benzinga Editor.
Cameron Dawson, a CFA and the chief investment officer at NewEdge Wealth, joined Benzinga's PreMarket Prep Thursday morning to discuss the Federal Reserve's Wednesday decision and what it means for stocks.
Dawson pointed out that the Fed's decision to maintain its plan for three rate cuts this year, in addition to strong economic growth, creates an ideal scenario for stocks.
"The phrase that came to mind all day yesterday, was just quoting to myself, was Wayne's World," Dawson said. "Truly it was a spark of ‘party on' and really is this a moment of being able to have our cake and eat it too, which is that you can have a friendly fed and yet still have growth that is strong and robust and supports things like risk assets in equities as well as within credit."
The Federal Reserve announced Wednesday that despite hotter-than-expected inflation metrics delivered in the past few weeks, the central bank still plans on cutting rates three times this year. The cuts are expected to come once a quarter in the last three quarters of the year.
Read Also: Fed Chair Powell Opens Door To Rate Cuts This Year, Downplays Recent Inflation Upticks: S&P 500 Rises To All-Time Highs
Dawson pointed out that Fed Chairman Jerome Powell‘s dovish tone on Wednesday was particularly rare in an environment where growth and inflation numbers are both rising.
"In past times higher growth expectations and higher inflation expectations, which we saw rise yesterday, would have been bad news from the Fed, but Powell struck a very dovish tone yesterday," Dawson said. "It was a tone of ‘hey we can continue to forecast the fact that we could cut rates even if growth is accelerating."
The market responded very well to the Fed's interest rate decision as well as Powell's comments, reaching new all-time highs in Wednesday's session. The market continued to push to new highs on Thursday, with the SPDR S&P 500 ETF (NYSE:SPY) breaching $524 for the first time ever.
The strong move in the overall market comes despite weakness in Apple Inc (NASDAQ:AAPL) after the Department of Justice announced a new antitrust suit against the tech giant. Dawson mentioned Apple's weakness against other tech companies in the full interview here.
Now Read: Reddit Shares Jump 62% On Debut: Investors, Analysts React On Social Media
Image created with a photo from LinkedIn and Shutterstock.com.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.