The SPY tends to do well after the Fed stands pat
The Federal Open Market Committee (FOMC) concluded its two-day policy meeting yesterday, and the Fed's decision to stand pat on rates surprised no one. During the current tightening cycle, the stock market has done well a month after the Fed holds rates steady -- especially compared to after a rate hike -- and several stocks have typically outperformed after these meetings, including natural gas concern Tellurian Inc (NASDAQ:TELL).
The SPDR S&P 500 ETF (SPY) has been higher in the month after the Fed rate hike held steady for 77% of the time since December 2015. Further, the exchange-traded fund (ETF) -- based on the broader S&P 500 Index (SPX) -- has averaged a one-month gain of 1.46%, per data from our Quantitative Analysis department. As Schaeffer's Senior V.P. of Research Todd Salamone has noted on several occasions, that's far better than the typical post-rate-hike returns, with the SPY averaging a one-month decline of 2.06% in these instances.
Below are the 25 best stocks to own the week after Fed meetings since 2015, courtesy of Schaeffer's Quantitative Analyst Chris Prybal. To populate the list, he considered all optionable stocks, and omitted equities that have too few historical returns.
Moving back to TELL, the oil name has averaged the biggest gain a week after Fed meetings, 8.56%. That's not looking too promising thus far, as the shares were last seen 7.3% lower to trade at $7.30. The oil-and-gas concern has dropped nearly 12% so far this week, due to sinking energy prices and a steeper-than-expected third-quarter loss, reported on Wednesday.
From a longer-term perspective, Tellurian shares have struggled beneath their 200-day moving average over the past few months, with the $9.60-$10 area also emerging as a ceiling. This region is where TELL landed after a bear gap in mid-June.
