Conventional wisdom said the Federal Open Market Committee (FOMC) would deliver a “hawkish” 25 basis points (bps) rate cut yesterday, but with a hard line in the sand on any future cuts. Considering the changes made to the summary of the economic projections, it felt more like a “dovish” cut and a victory lap. There were three dissenters as the Fed lurches more openly into the political realm. The market loved the news, and loved Fed Chair Jay Powell’s tone, and understands this is an accommodative Fed that’s even going to start asset purchases real soon.

The market is within spitting distance of the all-time high, and has meandered long enough that a breakout would create urgency for all the fence sitters and doubters. This is double top territory, so the inability to make new highs before the weekend could be seen as a yellow flag.

Market breadth was impressive, to be sure, although volume was lighter than I expected.

Green Acres

When every swath of the factors board is green, it's not just a good sign; it’s also hard to ignore. Small and midcap stocks continue their blistering pace.

Breakout

The iShares Russell 2000 ETF (IWM) made an impressive breakout and has a ton of wind in its sails.

The Fear & Greed Index is still stuck in “fear,” but there was mostly joy at the closing bell. We’ll see what the follow-through is today, but I can tell you holiday cheer is in the air. Turns out Powell decided not to be the Grinch this Christmas.

Today’s Session

The good vibes from the Fed were drowned out this morning by Oracle’s (ORCL) results.

Oracle (ORCL) is not the perfect proxy for AI. It’s something of a moot point as the investment opportunities from the Fourth Industrial Revolution are spreading throughout the economy, and stock market.