Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Eight times a year, the Federal Open Market Committee meets to discuss monetary policy. Lately, that has meant that eight times a year, investors play a waiting game during the Fed's meetings, trying to anticipate how the Dow Jones Industrial Average (DJINDICES: ^DJI ) will respond to whatever news comes from the central bank's policymakers. Dow components Boeing (NYSE: BA ) , Nike (NYSE: NKE ) , and Home Depot (NYSE: HD ) managed to rise despite the wait-and-see attitude on Wall Street, but overall, the Dow was up a negligible points shortly before 11 a.m. EDT as market analysts weighed whether the Fed would keep putting off the eventual reduction in bond-buying activity under its quantitative-easing policy.
Boeing has risen 0.9% as speculation continues to swirl about the aerospace giant's prospects to sell more than 250 of its long-haul 777X aircraft. Reports that Boeing is in talks with three major Persian Gulf airlines as well as Hong Kong airline Cathay Pacific has pushed Boeing's stock to all-time highs recently. As Fool contributor Daniel Miller noted yesterday, a single potential order from Dubai-based airline Emirates could bring in $30 billion for Boeing, and with the Dubai Airshow scheduled for mid-November, Boeing will have ample opportunity to show off all of its aircraft designs to potential buyers.
Nike has climbed more than 1.1% after getting a favorable upgrade from Morgan Stanley. Yet long-term investors realize that Nike's valuation already largely reflects Nike's huge promise, as the athletic shoe and apparel giant has managed to make the most of its core North American market lately even in the face of rising competition. By some measures, the entire athletic apparel industry is overpriced, but the big question facing shareholders is whether Nike's continued growth will live up to expectations.
Home Depot has added to yesterday's gains, rising another 1%. Arguably, Home Depot has the most to gain or lose from the Fed's decision today, as mortgage rates have been under the Fed's direct control ever since it started adding mortgage-backed securities to its bond-buying program. Yet investors should remember that Home Depot began its big bull-market run long before the housing industry started to rebound, and even if housing gives up some of its recent progress because of higher interest rates, the home improvement retailer has a track record of overcoming obstacles and finding ways to be profitable anyway.
Don't be scared of the Fed
With U.S. stocks soaring to new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!