Market Wrap-Up for June 19 (FDX, MA, MW, more)
Well, the day that pundits, analysts, and investors had been waiting for finally arrived. This afternoon we heard from Federal Reserve Chairman Ben Bernanke and got to see what the Fed had to stay regarding the U.S economic outlook and future monetary policy decisions. Investors, not happy with the FOMC policy statement and Bernanke’s comments in his subsequent press conference, dragged the indices deep into the red in a wild end of trading to end the day.
Before the opening bell this morning, FedEx (FDX) reported its fourth quarter earnings. The Memphis, Tennessee-based company’s earnings topped Wall Street estimates. Though the company issued a weak fiscal 2014 outlook, investors seem pleased with the results, causing its shares to close higher in today’s trading.
A stock that retreated today was Men’s Wearhouse (MW), after it announced that it terminated George Zimmer, its founder and Executive Chairman. He is know for delivering the company’s slogan in television commercials: “You’re going to like the way you look. I guarantee it.”
Shares of Mastercard (MA) closed in the green following a Wall Street analyst upgrade. Downgrades of Edison International (EIX), American Eagle (AEO), and Peabody Energy (BTU) dragged those shares into negative territory.
Be sure to check the Dividend Daily for all the latest earnings reports, analyst moves, and much more.
An Important Note About Inergy L.P.
Today, Inergy L.P. (NRGY) completed a distribution of Inergy Midstream (NRGM) units to its unitholders. As such, the stock’s price looks like it has fallen about $9, or 60%, during today’s trading. However, the stock has not fallen in value that drastically and it should not alarm NRGY unitholders. The full value of holdings is reflected in NRGY units and newly distributed NRGM units. As the company’s press release states:
“Inergy common units trading on the NYSE will be quoted “ex-distribution” at the market open today; and thus, the Inergy common unit price is expected to reflect the market value of the NRGM units that were distributed directly to Inergy unitholders.”
For more information, check out the full press release.
It’s All About the Fed…Or Is It?
All eyes were on what the Federal Reserve and Ben Bernanke might do or say this afternoon that signals the future of the central bank’s monetary policy. For the most part, the market would like to hear that the Fed will continue to its Treasury and mortgage-backed security buying program known as quantitative easing, as it provides an added injection of liquidity into the markets the fuels buying and boosts asset prices. However, many fear that the Fed will hint at the possibility that it may start to taper the program, weaning the markets off the loose monetary policy. Regardless of the eventual policy decisions, the market tends to overreact to the Fed’s statements, which did not fail to happen this afternoon.
Investors should remember that this possible overreaction is only a short-term movement that they should not be overly concerned with. In fact, the reaction today may not last as long as some might otherwise presume. Though we might see a bit of a spike or pullback today and for the rest of the week following the Fed decision, it may not carry over into next week. The reason for this is that we are heading toward the end of June, otherwise known as the end of the second quarter. Investors, especially big, institutional investors, like to use these end of the quarter trading sessions as a way to maneuver their positions so they look good on paper; its what we like to call a little bit of “window dressing.” So, this maneuvering to make holdings look good for clients and investors might trump any Fed reaction, at least for the next couple of trading sessions.
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