As the market continued to lack direction, the Federal Reserve announced that interest rates would be left alone for the foreseeable future. With the economy still at risk of a more significant downturn, monetary policy will remain status quot.
However, this morning economic data has stocks trading down right out of the gate. A revised Gross Domestic Product figure showed that the U.S. economy contracted at a pace of 5.5% for the first quarter. This number was slightly better than expected, but still painful for the American people. The Commerce Department did state that the economy is doing better now, but warned jobless claims will continue to be a drag.
The Labor Department said that jobless claims jumped at a seasonally adjusted 627,000. Economists had expected a drop to 600,000. The unemployment rate is currently at 9.4%, but expected to reach over 10% by the end of the year.
I’m still very cautious due to current market conditions. I think it’s still likely we see more downside on the major averages. That said, keep your powder dry and be ready to take advantage of my new ideas when they’re released.