2019 is off to a roaring start, as the S&P 500 Index gained 7.9% for its best January since 1987. Stocks’ strong January comes on the heels of the worst December in 87 years. What happens now? This week we will discuss why we see signs that point to higher prices, why the easy gains have likely already occurred, and what several key hurdles lie ahead.

Impressive Rally off the Lows

Since its low on December 24, 2018, the S&P 500 is up 15% (through 02/01/19) after investors bargain shopped. With the focus now shifting to trade, corporate profits, and clarity on Federal Reserve (Fed) policy, this was the easy part o

The Federal Reserve (Fed) just delivered a widely expected but important monetary policy decision. On January 30, policymakers decided to leave interest rates unchanged. More significantly, they removed language from the Fed’s policy statement that “some further gradual (rate) increases” would be consistent with economic conditions and added language that they would be “patient” when determining future rate adjustments. Markets cheered the significant shift in tone: The S&P 500 Index rose 1.6%, its biggest gain on a Fed day since December 2014, and the first time it has gained on the last day of the policy me

The Fed will likely pause interest rate hikes at its policy meeting this week. The Federal Reserve (Fed) meets this week, culminating in its rate decision on Wednesday, January 30. We expect the Fed to pause in response to slower global growth, trade tensions, and market volatility, although we believe at least one and possibly two more rate hikes are likely before the end of the cycle. At the same time, we recognize the possibility that the Fed’s December hike may have been its last.

Below, we’ll discuss potential stock market implications if the Fed is done, or nearly done, hiking interest rates. For more of our tho

Tensions around U.S. monetary policy remain high as recession fears grow and markets seek further reassurance that the Federal Reserve (Fed) is prepared to slow or stop future rate hikes as needed. The Fed will meet this week and make a rate announcement on Wednesday, January 30. Policymakers’ last rate announcement rattled investors, who have watched global economic data deteriorate, but Fed Chair Jerome Powell’s comments on flexibility have calmed markets. Although the bulk of U.S. data remains solid, growing uncertainty over several issues leaves the Fed with a delicate balancing act as it decides its next policy steps.

&nbs