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Inflation canceled that, and now it's almost certain that Wall Street's summer is canceled, too. That means Wall Street's fantasies of decamping to the Hamptons for the summer have shattered. You can see why this tug-of-war will keep Wall Street on its toes and off Georgica Beach. There is a certain set on Wall Street that does not get to "rosé all day" on Hamptons summer water when currencies trade that way. The simplicity that Wall Street hoped for is one of the few options that's no longer on the table.
Persons: , Justin Simon, decamping, Jerome Powell, opportunistically, Jamie Dimon, Torsten Slok, Slok, Powell, we'd, David Lefkowitz, dory, McDonald's, Silas Myers, Wall, Zuck, Simon, they're, it's Organizations: Federal Reserve, Jasper Capital, Nasdaq, Hamptons, JPMorgan, Fed, Pepsi, Mar Vista Investments, Wall, Nvidia, Tesla, Microsoft, Meta, Apple, EU Locations: Georgica, Japan
Elsewhere, the dollar lost ground against most of its peers and was headed for its worst week in nearly two months, in part due to the sharp rise in the yen this week. The euro ticked up 0.05% to last trade at $1.0730, and was eyeing a weekly gain of 0.35%. "Recent Fed speech has acknowledged the lack of progress on inflation and the desire to maintain the current level of policy rates for longer. Down Under, the Australian dollar edged 0.07% higher to $0.6570, and was on track to gain nearly 0.6% for the week. The New Zealand dollar tacked on a marginal 0.03% to $0.5963, and was eyeing a 0.4% weekly gain.
Persons: Tokyo's, Vishnu Varathan, Jerome Powell, Sterling steadied, Tai Hui Organizations: Traders, Bank of Japan, Ministry of Finance, Mizuho Bank, Federal, Fed, Morgan Asset Management, New Zealand Locations: Asia, tenterhooks, Tokyo, Japan
The Fed and economic policy were top of mind this week given the central bank's Wednesday decision to yet again leave interest rates unchanged , as it has since last summer. This week included the conclusion of April's trading month, which marked the first down month of the year for all three major market averages. Indeed, some recent earnings reports have raised doubts about the economy, with brands from McDonald's and Starbucks evidencing signs of strain among consumers. While no new inflation numbers are scheduled for release next week, investors will see reports on March wholesale inventories, March consumer credit and May consumer sentiment from the University of Michigan. AI trade Though interest rates took center stage this week, investors also continued monitoring companies tied to the artificial intelligence boom amid the stocks' recent choppiness.
Persons: they're, Jerome Powell, Larry Tentarelli, David Donabedian, Sam Stovall, There's, Stovall, Tom Hainlin, Tentarelli, CFRA's Stovall, Lyft, Cabot, Aramark, Tempur Sealy, Nikola, Walt Disney, Sally Beauty, Warby Parker, Krispy Kreme, Papa John's Organizations: Federal Reserve, Treasury, Nasdaq, Dow Jones, CIBC Private Wealth, Dow, CFRA, Citigroup, Bank of America, U.S, Bank Wealth Management, University of Michigan, Nvidia, Disney, Spirit Airlines, Tyson Foods, Pharmaceuticals, Lucid, Palantir Technologies, Simon Property, Tech, Lab, Goodyear Tire, Noble Corp, Vornado Realty, Coty, BellRing, Consumer, UBS, BP, Nintendo, Bloomin, Duke Energy, Rockwell Automation, Ferrari, NRG Energy, Electronic Arts, Cirrus, Adaptive Biotech, Arista Networks, Dutch Bros, Holdings, Virgin Galactic, IAC, Rivian Automotive, Brighthouse, Occidental Petroleum, Assurant, Kinross Gold, Labs, Diamond, Reddit, Anheuser, Busch InBev, Embraer, Health, United Parks & Resorts, Emerson Electric, Brookfield , New York Times, Food, Reynolds Consumer Products, Teva Pharma, Uber Technologies, Dine Brands, Liberty Broadband, Fox Corp, Cushman &, Liberty Media, Arm Holdings, Kodiak Gas Services, Solaredge Technologies, AMC Entertainment, Cheesecake, News Corp, Toyota Motors, Fair, US Foods, Hyatt Hotels, Warner Bros, Hilton, Warner Music Group, Unity Software, Insurance, Gen, Honda, AMC Networks Locations: Central, McDonald's, Expeditors, Occidental, Angi, Brookfield , New, Ambev, Cushman & Wakefield, Michigan
The Fed likely won't cut interest rates until after a recession arrives, according to GlobalData TS Lombard. The research firm said Fed Chair Powell is likely to fall into the trap of being reactionary when it comes to rate decisions. AdvertisementThe Federal Reserve is making a big mistake by not cutting interest rates right now, according to GlobalData TS Lombard chief US economist Steven Blitz. And if inflation sees a sharp rebound to 5%, "they obviously hike" interest rates, Blitz said. AdvertisementAll-in, according to Blitz, it means that interest rates could stay at current levels for longer-than-expected, especially since it appears there will be no recession this year.
Persons: Powell, Steven Blitz, Jerome Powell, Blitz, Jeremy Siegel Organizations: Fed, GlobalData, Lombard, Federal Reserve
An attendant holds a sample of newly-designed Japanese 10,000 yen banknote, with three-dimensional holographic technology to prevent forgery, for a photograph at the National Printing Bureau Tokyo plant in Tokyo, Japan, on Wednesday, June 28, 2023. The yen gave up ground in early trade on Thursday, reversing direction after a sudden surge against the dollar overnight that traders and analysts were quick to attribute to intervention by Japanese authorities. The dollar was 0.9% higher at 155.98 yen as of 0100 GMT, retracing about half of its late Wednesday surge from around 157.55 to exactly 153 over a period of about 30 minutes. "The 'sneak attack' element really is the MOF (Japan's Ministry of Finance) looking to punish speculators and send a warning about shorting the yen." That helped lift the dollar to a 34-year peak of 160.245 yen on Monday and also spurred a sharp reversal which official data suggested was due to Japanese intervention totalling about $35 billion.
Persons: Jerome Powell, Masato Kanda, Kyle Rodda, Sterling, Powell, Jack Mclntyre Organizations: National Printing Bureau, Federal Reserve, Reuters, Capital.com, Japan's Ministry of Finance, Bank of Japan, Brandywine Locations: National Printing Bureau Tokyo, Tokyo, Japan, U.S, Melbourne
Banks jumped 0.8%, while oil and gas stocks retreated 1%. European stocks opened mixed on Thursday as global markets react to the U.S. Federal Reserve's latest monetary policy decision and a slew of corporate earnings. Federal Reserve Chair Jerome Powell said it was unlikely that the central bank's next move will be a rate hike. Asia-Pacific markets were mostly higher overnight as traders reacted to the Fed's stance, while U.S. stock futures advanced as investors looked ahead to more corporate earnings due Thursday. Dutch bank ING was 5% higher in early deals after announcing a 2.5 billion euro ($2.7 billion) share buyback.
Persons: Banks, Jerome Powell, It's, Vestas, Hugo Boss Organizations: U.S, U.S . Federal, Dow, region's, Novo Nordisk, Shell, ING, AXA, ArcelorMittal Locations: London, U.S ., Asia, Pacific, Europe
Cracks might finally be forming in the Federal Reserve's firm hawkish stance, according to Fundstrat Global Advisors' Tom Lee. As investors expected, the Fed kept interest rates unchanged after central bank policymakers had their meeting. "That's not really an inflationary signal, so I think the bar is actually being lowered now for the Fed to cut and I think that's something many people picked up." All in all, Lee thinks there's a "good probability" that interest rates are currently at their peak. If inflation does indeed improve in the next few months and interest rates fall, he has optimistic prospects for stocks.
Persons: Tom Lee, Lee, That's, Jerome Powell, We're, Powell, there's Organizations: Fundstrat Global, Starbucks, Fed, Investors
Futures tied to the Dow Jones Industrial Average gained 212 points, or 0.55%. S&P 500 futures rose nearly 0.3%, while Nasdaq 100 futures advanced about 0.5%. In extended trading, Apple advanced more than 6% after it announced a $110 billion share repurchase and a top -and bottom-line beat. The S&P 500 popped 0.91%, while the Dow gained 0.85%. The S&P 500 is off by 0.7% week to date, while the Nasdaq is down nearly 0.6%.
Persons: Cloudflare, Dow, Jerome Powell, Sonu Varghese, payrolls, Dow Jones Organizations: New York Stock Exchange, Stock, Dow Jones Industrial, Nasdaq, Apple, Biotech Amgen, Dow, Carson Group Locations: New York City, U.S
Here's what to expect from the April jobs report on Friday
  + stars: | 2024-05-02 | by ( Jeff Cox | ) www.cnbc.com   time to read: +5 min
Allison Joyce | Bloomberg | Getty ImagesHiring likely continued at a brisk pace in April as investors look for any cracks in the labor market that could sway the Federal Reserve. If that top-line number is accurate, it actually would reflect a small step back from the average 276,000 jobs a month created so far in 2024. April's jobs market featured more strength in health care and leisure and hospitality, Glaser added. Beating expectationsIndeed, the labor market has been full of surprises this year, topping Wall Street estimates at a time when many economists expected hiring to have slowed down. "The Goldilocks scenario is an unemployment rate rise with a participation rate rise," Matus said.
Persons: Allison Joyce, Nonfarm payrolls, Dow Jones, Amy Glaser, resiliency, Glaser, we've, Drew Matus, Matus, Jerome Powell Organizations: Brunswick Community College, Bloomberg, Getty, Federal Reserve, MetLife Investment Management, of Labor Locations: Bolivia , North Carolina
US futures slid as traders weighed Amazon's earnings beat against Starbucks and McDonald's misses. The Federal Reserve is set to provide an update later on the likely trajectory of interest rates. McDonald's also fell short of Wall Street's revenue, earnings, and same-store sales estimates for last quarter as consumers spent less at the fast-food chain. A painful combination of historic inflation and soaring interest rates over the past couple of years have squeezed household budgets and stoked concern of a recession. Stubborn inflation in recent months has dampened Wall Street's hopes that the Fed will cut rates in the months ahead.
Persons: , Stocks, Amazon's, Ipek Ozardeskaya, McDonald's, Jerome Powell, Ozkardeskaya, Tesla Organizations: Starbucks, Federal, Service, Amazon, Nasdaq, Dow Jones Industrial, Amazon Web Services, Swissquote Bank, Consumers, Fed, Elon Musk's
The only reason the Federal Reserve might be tempted to cut rates would be to help the U.S. cover interest payments for the national debt, according to fund manager Freddie Lait. The Fed is widely expected to keep its benchmark overnight borrowing rate in a range between 5.25%-5.5%. Traders are currently only pricing in about a 50% chance of a Fed rate cut taking place as early as September and expect just one quarter-percentage-point reduction by the end of the year, according to the CME FedWatch Tool. The reason they might cut is because the U.S. government can't afford [them not doing] it — and that's a much scarier reason to have to cut," he added. A spokesperson for the Federal Reserve declined to comment.
Persons: Freddie Lait, Lait Organizations: Federal Reserve, Federal, U.S, Traders Locations: U.S
Stock futures advanced Wednesday night as investors looked ahead to more corporate earnings due Thursday and key labor data set for later in the week. S&P 500 futures climbed 0.3%. Restaurant delivery service DoorDash dropped 15% after reporting a wider loss per share than Wall Street forecast. Those moves followed a choppy day on Wall Street as investors reacted to the Federal Reserve's decision to keep interest rates unchanged. The Dow finished about 0.2% higher, while the S&P 500 and Nasdaq Composite both closed the session lower by roughly 0.3%.
Persons: DoorDash, Jerome Powell, Eric Winograd, Winograd, Coinbase Organizations: Dow Jones Industrial, Nasdaq, Qualcomm, Federal, Dow, Apple, Moderna Locations: AllianceBernstein, Friday's
Gold subdued as traders ready for Fed rate verdict
  + stars: | 2024-05-01 | by ( ) www.cnbc.com   time to read: +1 min
Gold prices struggled for momentum on Wednesday as investors refrained from taking big positions ahead of a U.S. Federal Reserve policy decision that could offer for more cues on its rate-cut timeline. U.S. gold futures were down 0.2% at $2,298.30 per ounce. The Fed is expected to hold its benchmark interest rate steady at 5.25% to 5.5%. Gold is known as an inflation hedge but elevated interest rates reduce the appeal of holding the non-yielding asset. Among other metals, spot silver rose 0.2% to $26.32 per ounce and platinum inched up 0.2% to $935.10.
Persons: Edward Meir, Jerome Powell, Powell, Meir Organizations: U.S, Federal, Focus, Labor, Palladium
DoubleLine Capital CEO Jeffrey Gundlach said Wednesday that he now sees no more than one interest rate cut this year as the Federal Reserve keeps policy tight to fight stubborn inflation. "The inflation rate clearly is the one that is lacking progress as [Jerome Powell] put it, so I'm going to lean on one rate cut," Gundlach said on CNBC's " Closing Bell." "Higher for longer … seems like the mantra continues, but without a rate hike. Treasury yields dropped to their session lows and stocks shot to session highs as Powell said the next policy move will not be a rate increase. "I think it's unlikely that the next policy rate move will be a hike.
Persons: Jeffrey Gundlach, Jerome Powell, Gundlach, Powell Organizations: DoubleLine, Federal Reserve, Treasury
Investors can lock in some juicy real yields with Treasury inflation-protected securities, according to UBS. "The result has been rising real yields further out the curve, offering the opportunity to lock in attractive real yields ahead of expected falling nominal yields later this year," she added. Treasury yields are expected to decline when the Federal Reserve starts reducing the fed funds rate. Nominal yields have been rising as the market reassesses those interest rate expectations. "Our expectation of declining nominal yields in the second half of the year will be a tailwind to performance," she said.
Persons: Leslie Falconio Organizations: Treasury, UBS, Federal Reserve, Treasury Department Locations: UBS Americas
U.S. crude oil fell below $81 a barrel Wednesday in the third straight day of losses as hopes for cease-fire in Gaza and growing concerns about the future course of interest rates in the U.S. weighed on prices. U.S. crude oil is now off 8% from its intraday high for the year of $87.67, when traders bid up prices on fears that Iran and Israel were on the brink of war. Here are today's energy prices:Traders will be closely monitoring the Federal Reserve's meeting Wednesday for any indication of the central bank's future course on interest rates.
Locations: Gaza, U.S, Iran, Israel
With its decision to hold the line on rates, the committee in its post-meeting statement noted a "lack of further progress" in getting inflation back down to its 2% target. The process has resulted in the central bank balance sheet to come down to about $7.4 trillion, or $1.5 trillion less than its peak around mid-2022. Under the new plan, the Fed will reduce the monthly cap on Treasurys to $25 billion from $60 billion. The reduction of the balance sheet roll-off, then, can be seen as a slight easing measure. The Fed uses interest rates to control the flow of money, with the intent that higher rates will dampen demand and thus help reduce prices.
Persons: Jerome Powell, Powell Organizations: WASHINGTON, Federal Reserve, Fed, Market, Dow Jones Industrial, Treasury Locations: U.S
Light trading volumes are expected in Europe on Wednesday, with only London's FTSE index open, due to the May Day/Labor Day public holiday in the region. Nonetheless, global markets are focused on the U.S. Federal Reserve's latest interest rate announcement after the central bank's monetary policy committee concludes a two-day meeting later on Wednesday. The latest interest rate decision follows another hotter-than-expected U.S. inflation reading last Friday. S&P 500 futures slipped Tuesday night as investors looked ahead to the Federal Reserve's rate policy decision. In the Asia-Pacific region overnight, Australian and Japanese markets fell as investors braced for the Fed's rate decision.
Persons: Jerome Powell Organizations: Labor, U.S, U.S . Federal Locations: Europe, U.S ., Asia, Pacific
The quarterly measure saw wage and labor costs accelerate, adding pressure on the Fed. Tuesday marks the start of the Fed's meeting of the Federal Open Market Committee. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementUS equity markets slipped Tuesday as hot labor data stoked fresh bets the Federal Reserve would remain hawkish on monetary policy. The Employee Cost Index, a quarterly measure of wages and benefits, jumped 1.2%, suppressing estimates of a 1% acceleration.
Persons: , It's Organizations: Fed, Federal, Market, Service, Reserve, of Labor Statistics, Amazon, Apple, Here's, Trump, Bloomberg
Recent commentary from policymakers and on Wall Street indicates there's not much else the committee can do at this point. But they're still hopeful that they will be in a position to cut rates later." Markets actually have held up pretty well since Powell made those comments on April 16, though stocks sold off Tuesday ahead of the meeting. Some on Wall Street, though, are still hopeful that inflation data will show progress and allow the central bank to cut. The Wall Street bank's economists are preparing for the possibility that the Fed could be on hold for longer, particularly if inflation continues to surprise to the upside.
Persons: Jerome Powell, Kent Nishimura, Guy LeBas, Janney Montgomery Scott, they're, Powell, We've, there's, specter, LeBas, There's, Goldman Sachs, David Mericle, , Donald Trump, Goldman, Mericle Organizations: Banking, Housing, Urban Affairs Committee, Getty, Federal Reserve, Federal, Market Committee, Fed, Dow Jones, Department, Labor Department, Republican
Mohamed El-Erian named three key risks that will determine where US growth is headed in 2024 through 2025. That includes changes to the Fed's inflation target and low-income consumer spending. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementIf Wall Street was wrong about recession odds in 2023 and 2024, forecasting for next year won't be any easier, Cambridge economist Mohamed El-Erian wrote in Project Syndicate. "Given high interest rates and some creditors' loss of enthusiasm, this cohort's willingness to consume will hinge on whether the labor market remains tight," El-Erian wrote.
Persons: Mohamed El, Erian, , he's Organizations: Service, Project Syndicate, Federal Reserve, El Locations: Cambridge, El
A handful of drivers will keep the American economy humming along, said Jose Rasco, chief investment officer of the Americas at HSBC's wealth division. On the cyclical front, Rasco expects growth to cool as the effects of higher rates become fully felt. "Those four themes suggest to me that's how we avoid recession," said Rasco, a Lehman Brothers and Merrill Lynch alum. Bonus: Presidential election year While not exactly an investment trend, Rasco also noted that a big part of his short-term optimism toward U.S. stocks stems from the looming presidential election. Data shows U.S. stocks tend to outperform in presidential election years.
Persons: Jose Rasco, Rasco, Merrill Lynch, it's Organizations: Federal Reserve, CNBC Pro, Federal, Lehman Brothers, U.S, U.S . Research, BlackRock, HSBC Asset Management Locations: New York City, Americas, China, Mexico, U.S
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailJapanese central bank's stance can be viewed as dovish, says former BOJ officialKazuo Momma, executive economist at Mizuho Research & Technologies and former Bank of Japan assistant governor, discusses Bank of Japan's decision to keep its key rate unchanged.
Persons: Kazuo Momma Organizations: Mizuho Research & Technologies, Bank of Japan
Finally, consumers are dipping into savings to fund those purchases, creating a precarious scenario, if not now then down the road. With unemployment under 4%, it shouldn't be that surprising that prices aren't" going down, said Joseph LaVorgna, chief economist at SMBC Nikko Securities. So you might have a sticky inflation scenario." "If inflation remains higher, the Fed will be faced with the difficult choice of pushing the economy into a recession, abandoning its soft-landing scenario, or tolerating inflation higher than 2%," Sanders said. "To us, accepting higher inflation is the more prudent option."
Persons: Justin Sullivan, Joseph LaVorgna, LaVorgna, Donald Trump, Biden, Mike Sanders, Sanders Organizations: Getty, Federal Reserve, Commerce Department, Nikko Securities, National Economic Council, Madison Investments Locations: San Rafael , California, U.S
US stocks rose on Friday as markets assessed new inflation data in the form of March PCE. The Fed's preferred gauge showed inflation rose 2.8% year-over-year, slightly higher than estimates. AdvertisementUS stocks climbed on Friday, with investors digesting new inflation data and cheering earnings from mega-cap tech titans Microsoft and Alphabet. Personal consumption expenditures data showed prices rose more than expected last month. The Federal Reserve's preferred measure of inflation showed an uptick of 2.8% versus estimates of 2.7%.
Persons: , Clark Bellin Organizations: PCE, Microsoft, Google, Service, Federal, Bellwether
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