‘Pragmatic’ Fed feeds rally
Stocks are rolling higher as investors bet a “pragmatic” Fed will cut rates again next month. Among the biggest gainers are Citi (C), up 7% a day after it posted a 2% decline in spite of a big investment from Abu Dhabi, and Freddie Mac (FRE), up 12% on a plan to sell preferred stock. Many of the other names on the most active list are smaller, less well known names such as bond insurer Security Capital (SCA) and footwear maker Genesco (GCO). Barry Ritholtz compares the market, on the verge of its first two-day winning streak in weeks, to the Knicks — while cautioning that the wild swings suggest a poor market for stocks. But whatever you do, don’t call this a short-covering rally: Bespoke Investment Group says stocks with heavy short interest tend to outperform whenever the market rallies. It’s only a matter of time till someone reminds us this is a stock picker’s market.
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