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A Dovish Yellen and a Dovish Congress Drive Stocks Higher

On Tuesday, the equity markets enjoyed one of their best days of the year, with big buying in the broad market that sent the S&P 500 back above its 50-day moving average. The benchmark measure of the domestic equity market really started to take off around 11 a.m. EST.

Why?

Well, that’s when Fed Chairman Janet Yellen began answering questions about the labor market during her Congressional testimony. Comments by Yellen indicating she was “surprised” by the weakness in the December employment report, and that despite seeing some improvement in the labor market, things weren’t yet back to “normal,” were widely read as “dovish.” That comment means the Fed likely will keep its foot on the accelerator until the labor market improves substantively.

Read more about the Fed-charted course for continued economic recovery at Eagle Daily Investor.

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A Dovish Yellen and a Dovish Congress Drive Stocks Higher

Comments by Yellen indicating she was â??surprisedâ?ť by the weakness in the December employment report, and that despite seeing some improvement in the labor market, things werenâ??t yet back to â??normal,â?ť were widely read as â??dovish.â?ť

On Tuesday, the equity markets enjoyed one of their best days of the year, with big buying in the broad market that sent the S&P 500 back above its 50-day moving average. The benchmark measure of the domestic equity market really started to take off around 11 a.m. EST.

Why?

Well, thatâ??s when Fed Chairman Janet Yellen began answering questions about the labor market during her Congressional testimony. Comments by Yellen indicating she was â??surprisedâ?ť by the weakness in the December employment report, and that despite seeing some improvement in the labor market, things werenâ??t yet back to â??normal,â?ť were widely read as â??dovish.â?ť That comment means the Fed likely will keep its foot on the accelerator until the labor market improves substantively.

Read more about the Fed-charted course for continued economic recovery at Eagle Daily Investor.

Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbertâ??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

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