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4 Big-Name Stocks Restore a Bullish Tone

Bullish signs amid Fed 'taper' report due Wednesday


The first two weeks of December are, thankfully, behind us. Last week was one of the worst downticks of the year, with the S&P 500 sliding by 2.2% before catching Monday’s solid bid off its key 50-day moving average.

Analysts have attributed the selling pressure almost entirely to the two-day FOMC meeting that concludes Wednesday, with the Fed announcing its forward fiscal policy at 2:00 p.m. ET.

To say this meeting is the most anticipated event of the fourth quarter, if not the year, would be an understatement. Most market professionals claim that Fed tapering has to a large degree been priced into equities already. The selling of the front end of December was sparked by strong economic data, leading investors to fast-forward the expected beginning of the Fed reducing QE from March to January.

Monday’s solidly higher reading on industrial production (1.1% versus 0.4% forecast) only added to the heightened state of anticipation of near-term tapering — but because of some new catalysts at work, a pivotal shift in sentiment occurred from yesterday’s opening bell, and today’s session looks to build on that shift. Attention is quickly turning to big-name blue-chip stocks that are hiking their dividends, splitting shares and announcing monster stock repurchases: the tangible stuff that rallies can really feed off of.

It started last week with MasterCard (MA) announcing a 10-for-1 stock split, an 83% quarterly dividend hike and a new $3.5 billion-share buyback. Then came Goldman Sachs’ (GS) big upside call on ExxonMobil (XOM), which propelled that stock to a new all-time high.

This was followed last night by Boeing (BA) announcing a $10 billion buyback and raising its dividend by 50%. And this morning the headline crossed the tape that 3M (MMM) provided forward guidance at the upper end of its range and will boost its dividend by 35%.

This kind of highly bullish news flow is rapidly taking center stage at just the right time, as there is a prevailing sense of vulnerability for the market when the Fed removes the punch bowl possibly before New Year’s. The notion of whether the market is ready for the taper — and just how it will trade come the reality of it — is a jump ball at this point.

I, for one, think that the Fed will talk more generically about tapering sometime in the first quarter, affording a semblance of certainty to future policy while at the same time letting the bulls finish out the year on an upbeat note.

Article printed from InvestorPlace Media,

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