Tuesday’s testimony by new Federal Reserve Chair, Janet Yellen, before the House Financial Services Committee sent the stock market soaring.
The stock market expressed its approval of the new Federal Reserve Chair, Janet Yellen, as the Dow Jones Industrial Average and the S&P 500 soared higher than one percent, while completing the formation of bullish, inverse head-and-shoulders patterns on their charts, suggesting the likelihood of continued advances. Yellen’s testimony that she expects “a great deal of continuity in the FOMC’s approach to monetary policy” provided investors with exactly what they wanted to hear. The new Federal Reserve Chair presented her first Semiannual Monetary Policy Report to Congress on Tuesday.
The Dow Jones Industrial Average (DIA) picked up 192 points to finish Tuesday’s trading session at 15,994 for a 1.22 percent advance. The S&P 500 (SPY) jumped 1.11 percent to close at 1,819.
The Nasdaq 100 (QQQ) also jumped 1.11 percent to finish at 3,621. The Russell 2000 (IWM) surged 0.93 percent to end the day at 1,129.
In other major markets, oil (USO) rose 0.03 percent to close at $35.64.
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced 27 cents (0.25 percent) to $108.23/bbl. (BNO).
April gold futures advanced $16.60 (1.30 percent) to $1,291.30 per ounce (GLD).
The transportation sector was back in the air on Tuesday, as the Dow Jones Transportation Average climbed 1.15 percent to 7,254, coming up short of its 50-day moving average of 7,271 (IYT).
In Japan, the Tokyo Stock Exchange was closed for National Founding Day. The Nikkei 225 Stock Average is currently at 14,718 (EWJ).
In China, investors were saying “Thank Yu” after an upbeat report from Michael Yu of JPMorgan in Hong Kong discussed the firm’s expectations for a 15-20 percent stock market rebound during the coming weeks, as the market’s focus switches to structural reforms. The Shanghai Composite Index climbed 0.84 percent to 2,103 (FXI). Hong Kong’s Hang Seng Index jumped 1.78 percent to 21,962 (EWH).
In Europe, the Euro STOXX 50 Index really did advance after America’s new Federal Reserve Chair, Janet Yellen, began her testimony before the Financial Services Committee. The STOXX 50 had risen to 3,058 at 10:00. By the closing bell, the STOXX 50 had reached 3,077. Did Yellen’s testimony that she would “stay the course” have anything to do with it? AFP says yes. The Euro STOXX 50 Index finished Tuesday’s session with a 1.47 percent jump to 3,077 – crossing above its 50-day moving average of 3,047 and completing the formation of a bullish, inverse head-and-shoulders pattern on its chart. Its Relative Strength Index is 54.97 (FEZ).
Technical indicators revealed that the S&P 500 finally crossed above its 50-day moving average of 1,809 after climbing 1.11 percent to finish Tuesday’s trading session at 1,819. Its Relative Strength Index (RSI) rose from 50.45 to 55.55. The MACD crossed above the signal line, suggesting that the S&P could continue its advance during the immediate future.
Consumer Discretionary (XLY): +0.73%
Technology: (XLK): +1.22%
Industrials (XLI): +1.12%
Materials: (XLB): +1.16%
Energy (XLE): +1.30%
Financials: (XLF): +1.03%
Utilities (XLU): +0.94%
Health Care: (XLV): +1.36%
Consumer Staples (XLP): +1.17%
Bottom line: Stock markets in Europe as well as the United States responded favorably to the testimony by Federal Reserve Chair, Janet Yellen, in her first Semiannual Monetary Policy Report to Congress.
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