President Donald Trump is known for voicing his concerns and views on the Federal Reserve and the US economy on Twitter. As expected, he entered the Federal Reserve yesterday, although he announced a long-awaited interest rate cut.
The long-awaited decline in the percentage
The long-awaited rate cut happened yesterday. The Fed cut the federal fund's interest rate by 25 basis points, marking the first rate cut in a decade. The Fed was feeling the pressure of cutting market interest rates and President Trump. Trade tensions, tariffs, earnings recession expectations and weak inflation have forced the Federal Reserve's arm to make a cut.
Although many former Fed leaders supported the percentage reduction, many also felt that no reduction was needed. The economy seemed stable. The amount of work was good. Consumer confidence returned to its highest level in 2019 in July, according to data released on July 30. Consumers have given up on trade problems and expect short-term business conditions to improve in the second half of the year. A preliminary estimate of GDP data for the second quarter, released on July 26, also looked great.
Before the Fed rate cut happened, Trump had already thrown himself at the Fed, saying he had made all the wrong moves and he wanted to see a big reduction. He was not satisfied with the outcome of the decision to reduce the rate. A USA Today The article said the president mentioned that Jerome Powell was "letting us in", not signaling a further reduction. In a tweet in the late afternoon, Trump again mentioned that the market expects to hear that this is the beginning of a long and aggressive cycle of slowing down. The article also mentions that Powell told reporters that the US economy is doing well and is not in recession, so a sustained effort to cut rates is not appropriate.
Trump's tweet about the US economy
The second night of the Democratic presidential debate also happened yesterday. Trump is tweeting"If I didn't win the 2016 election, we would be in a big recession / depression now." President Trump often boasted about how the US economy has improved under his administration. However, a recent Fox News poll showed that the economy is at its best since 2001. The Trump administration has not made much of a contribution.
The number of jobs has improved dramatically, but continuing trade escalations have taken many out of the market. Many companies have suffered this quarter due to tensions in trade and this has had an impact on their earnings results.
How does the market react to the reduction in interest rates?
The hope of a reduction in interest rates has driven the market since June, so it was expected that a reduction in interest rates would trigger a market rally. Markets, however, have fallen since the rate cut was announced.
The SPDR Dow Jones Industrial Average ETF (DIA) tracks the Dow Industrial Average Index. The DIA fell 1.2% yesterday and returned 1.0% in July. The Invesco QQQ Trust, Series 1 ETF (QQQ) tracks the compiled Nasdaq Index. QQQ fell 1.09% yesterday and gained 1.3% in July.
The SPDR S&P 500 ETF (SPY) tracks the S&P 500 index. SPY fell 1.09% yesterday and returned 1.5% in July. Despite market launch, some cannabis stocks jumped yesterday.
The profit also led to market launch this week
Many large companies released their profits this week, which led to market launch. Among them was Apple (AAPL), which posted better-than-expected fiscal results for the third quarter of 2019, outperforming analysts' estimates for both revenue and revenue. However, the stock did not perform well due to declining iPhone sales. AAPL rose 7.6% in July.
Samsung (SSNLF) also released its second-quarter results this week. This disappoints investors with a decline in operating profits. General Electric (GE) reported second-quarter earnings yesterday. It defeated Wall Street estimates for both its top and bottom lines and fell 0.48% in July. Boeing (BA) posted poor second-quarter results and fell 6.2% in July.
Advanced Micro Devices (AMD) also released its second-quarter earnings results yesterday. The stock closed in July with a gain of 0.26%. General Motors (GM) will release its second-quarter earnings results today. The company announced on July 30 that it was shutting down production at one of its oldest plants. Its shares rose 4.7% in July.
Stay tuned to find out more about today's winnings.