S&P 500 Response to the Pending Fed Rate Hike. Hint: It's Probably Positive.

Presuming Ms. Yellen and other Federal Reserve officials are telling the truth about pending rate hikes, the market will likely see a rate hike later this year, albeit likely only a minor, mostly symbolic rate hike.

How will the market respond?

Here's a look at the return of the S&P 500 following the past 13 Fed rate hikes, as well as the prior 77 instances of rate hikes.

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Federal Funds Target Rate

As background, the following graphic is the federal funds target rate from September 1982 to May 2015.

In red are the rate hiking cycles (13 of them).

In orange are non-rate hiking periods.

Of the many potential stories, one interesting observation is the more plodding method the Federal Reserve has developed...