Stocks Soar On Fed's Openness To Rate Cuts

Plus New Zacks Strong Buys for Wednesday, June 5 Profit from the Pros Stocks Soar On Fed's Openness To Rate Cuts Stocks soared yesterday after the Fed signaled their openness to cutting rates. As trade and tariff worries have been weighing on stocks (first with China and now possibly Mexico), Fed Chair Jerome Powell indicated that the Fed was watching both inflation (and the potential for inflation shortfalls), and trade. While both could pose a "downward drift" to the economy, investors cheered Mr. Powell's willingness to cut rates if needed. This was the backstop traders have been hoping for if tariffs were to take a bite out of our economy. Of course, none of this may be necessary if the U.S. and China can strike a trade deal soon. Same goes for the proposed tariffs on Mexico that have been tied to pass-through asylum seekers and illegal immigration. While no timetable was given by Chairman Powell on rate cuts, the market is pricing in a near certainty (97%) that the Fed cuts rates at least one time by year's end. Monday's tech wreck was all but forgotten yesterday. While big tech like Google, Apple, Facebook and Amazon are likely to remain in the hot seat for quite some time, many don't see a viable anti-trust case. And whatever shape the investigation takes is likely to drag on, and most likely end in a settlement. Of course, no one knows for sure how this will all play out. But the panic that gripped tech yesterday has subsided considerably, at least for the time being. In the meantime, the economy looks great. Same goes for employment. And we'll get another look at employment numbers on Friday with the always important Employment Situation Report. At the moment, the consensus is calling for 180,000 new jobs to have been created last month (175K in the private sector and 5K in the public), with the unemployment rate ticking up from 3.6% to 3.7%. This morning's ADP Employment Report, which is forecasting 175K private sector jobs being created last month, could very well foreshadow Friday's jobs report. But we'll have to wait and see. For now, traders will be focused on today and if the market can build on yesterday's gains. Best, Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [3 Hot Marijuana Picks to Buy Now]( In the first two months after California dispensaries started to legally sell recreational marijuana, companies in the cannabis industry increased by nearly $2 billion in value. And now Canada just legalized recreational marijuana. Savvy investors are already grabbing positions in these 3 picks that are set to soar. 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