US stocks initially rallied after the Federal Reserve held interest rates steady, forecasted two interest rate cuts later this year, and Chairman Jay Powell suggested the economy was still strong. We are adding European positions like the iShares MSCI Eurozone ETF (EZU), and SPDR EURO Stoxx 50 ETF (FEZ), notes Brian Kelly, editor of MoneyLetter.
The Fed also released its latest “dot plot,” which indicates that members, as a whole, are still expecting to ease the Fed funds rate before the end of this year. With the help of the post-Fed rally, all our global stock markets were higher over the reporting period.
EZU, FEZ (YTD % Change)
Data by YCharts
For March 13 through March 19, the S&P 500 gained 1.3%; the Euro Stoxx 50 jumped 2.8%; the Nikkei 225 was 2.5% higher; the Shanghai Composite was also a winner, gaining 1.6%.
US stocks appear to be stabilizing and recovering modestly from their recent correction. While we expect volatility to continue amidst uncertainty related to tariffs, immigration, and government headcounts, there are no signs of widespread economic slowing. The Fed pointing to interest rate relief later this year is also supporting stock prices.
For international stock funds, there are three new buys, including EZU and FEZ.
