For once, good economic news didn’t raise the specter of further rate hikes by the Fed, although that possibility moved up on the odds’ chart.
The market got help from an unlikely source in recent days: General Motors. The once icon of American manufacturing prowess has been badly beaten up in the auto and stock market.
Merrill Lynch changed its rating on GM from “sell” to “neutral” and the stock bounced up $1.74 per share.
Today may be a different story. Fed chief Ben Bernanke addresses Congress on the economic outlook. Several days ago, the betting was that the next Fed meeting in May would be the last rate hike for a while.
However, the economy continues to put up strong numbers in the face of record high oil prices and that has to be of concern to the Fed.
Also today, Exxon Mobil reports its earnings, which are expected to be substantially higher than the record-breaking numbers from last quarter.
This will make investors happy, but expect a strong negative public reaction. There will be renewed calls for windfall profit taxes and general outrage.
