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☆ Stocks aren't pricing in the potential for a significant slowdown in the economy as the Fed will have to keep pushing interest rates higher, Goldman Sachs says
▼ + stars: | 2022-12-06 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

The Federal Reserve will hold rates at about 5% for an extended time, Goldman Sachs multi-asset solutions co-CIO, Maria Vassalou, said. "What the market is pricing in, in terms of terminal rate, may actually be way too optimistic." And if inflation expectations become deeply entrenched, she added, the Fed may be forced to push the terminal rate higher than expected. "So the expectation is they will raise rates, probably about 5% given incoming data, and they will have to stay at this restrictive level for a period to come." Early next year, additional increases are seen that would bring the fed funds rate at or just above 5%.

☆ The S&P 500 could plunge 20% within months as a recession ushers in a market correction, BofA says
▼ + stars: | 2022-12-05 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

Bank of America equity strategists warned that stocks could see a correction in 2023 as a recession looms. Historical trends suggest the S&P 500 bottoms out during a recession, rather than before, which suggests more downside ahead. In a Monday note to clients, the bank warned the index could fall to 3,240 by April 2023. In a Monday note to clients, the bank's analysts said that the S&P 500 could fall as low as 3,240, or roughly 20%, from it's current mark of about 4,100. "History suggests that if the US economy experiences a recession, the SPX bottoms out during the recession and not before," the analysts wrote.

☆ Wall St Week Ahead Stocks typically rally in December, investors have some caution this year
▼ + stars: | 2022-11-25 | by ( David Randall | ) www.reuters.com time to read: +5 min

September, meanwhile, is the worst month of average for stocks, with a 0.7% average decline. Gains would be welcomed by many investors after seeing the S&P 500 Index (.SPX) fall around 16% so far this year. Still, weighing on the market has been the U.S. Federal Reserve's actions to aggressively tighten interest rates to fight inflation. The average Santa rally has boosted the S&P 500 by 1.3% since 1969, according to the Stock Trader's Almanac. The painful double-digit declines in both U.S. stocks and bonds, meanwhile, have made both asset classes more attractive for long-term investors, said Liz Ann Sonders, chief investment strategist at Charles Schwab.

☆ Asia stocks surge as cooling inflation feeds hopes Fed will ease up
▼ + stars: | 2022-11-11 | by ( Ankur Banerjee | ) www.reuters.com time to read: +2 min

After four consecutive 75 basis-point interest rate hikes to tame decades-high inflation, the case is now building for the Fed to moderate its aggressive stance, said Rodrigo Catril, senior currency strategist at National Australia Bank in Sydney. Financial markets have now priced in an 85% likelihood of a smaller, 50 basis-point interest rate hike at the conclusion of next month's FOMC policy meeting, according to CME's Fedwatch tool. Mainland China stocks (.SSEC) opened 2.1% higher, while Hong Kong shares (.HSI) shot up 6.5% in early trade. In the currency market, the U.S. dollar index slumped more than 2% overnight to 108.100, the most in over a decade. Meanwhile, oil prices rose on Friday as fears of a U.S. recession eased but they were on track for weekly declines of more than 4% due to COVID-related worries in China.

☆ Wall St ends sharply higher as cooling inflation fuels hope of easing Fed
▼ + stars: | 2022-11-10 | by ( Stephen Culp | Simon Jessop | ) www.reuters.com time to read: +4 min

The risk-on fervor also sent the 10-year Treasury yield to its lowest level in five weeks and the safe-haven greenback plummeting. Inflation"It shows you how focused asset owners were on inflation compared to everything else going on in the world," Tuz said. The pan-European STOXX 600 index (.STOXX) rose 2.75% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 4.57%. Signs that the decades-high inflation growth is beginning to ebb sent U.S. Treasury yields to a five-week low, supporting expectations that the Fed could ease its foot from the rate-hike accelerator. The dollar index fell 2.41%, with the euro up 2.07% to $1.0218.

☆ Wall St surges, dollar tumbles as easing inflation fuels Fed abatement hopes
▼ + stars: | 2022-11-10 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

The risk-on fervor also sent the benchmark Treasury yield to its lowest level in five weeks and the safe-haven greenback plunged. Inflation"It shows you how focused asset owners were on inflation compared to everything else going on in the world," Tuz said. The pan-European STOXX 600 index (.STOXX) rose 2.75% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 3.97%. Signs that the decades-high inflation growth is beginning to ebb sent U.S. Treasury yields lower, supporting expectations that the Fed could ease its foot from the rate-hike accelerator. The dollar index fell 2.06%, with the euro up 1.68% to $1.0179.

☆ Wall Street surges, dollar plunges as inflation data boosts Fed slowdown hopes
▼ + stars: | 2022-11-10 | by ( Stephen Culp | Margaryta Chornokondratenko | ) www.reuters.com time to read: +4 min

"This is welcome news," Cardillo added, suggesting that "there's a possibility the Fed raises interest rates by 50 basis points in December and then takes a pause." Signs that decades-high inflation growth is beginning to ebb sent U.S. Treasury yields lower, supporting expectations that the Fed could ease its foot from the rate-hike accelerator. The dollar lost ground against a basket of world currencies as sunny economic data lured investors away from the safe-haven greenback. The dollar index fell 1.96%, with the euro up 1.55% to $1.0166. Gold prices jumped as the dollar dropped, reflecting hopes that the inflation data could rein in the Fed's hawkish stance.

☆ Wall St rallies to close out soft week after jobs report
▼ + stars: | 2022-11-04 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +4 min

But the data also showed average hourly earnings rose slightly more than expected, as did job growth, pointing to a labor market that largely remains on firm footing. Nonfarm payrollsLabor market data has been a primary focus for markets as the Fed has repeatedly stated it is looking for some cooling before considering a pause in hikes. "This was not a report that shows the rate hikes are starting to take hold," said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago. The Dow Jones Industrial Average (.DJI) rose 410.27 points, or 1.28%, to 32,411.52. Starbucks Corp jumped after it topped Wall Street estimates for quarterly comparable sales and profit, while DoorDash Inc's (DASH.N) revenue beat boosted the food delivery firm's shares.

☆ Wall Street surges to sharply higher close ahead of Fed week
▼ + stars: | 2022-10-28 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

Analysts now see third-quarter S&P 500 earnings growth of 4.1%, up from 2.5% on Thursday, according to Refinitiv data. Of the 11 major sectors of the S&P 500, all but consumer discretionary stocks (.SPLRCD), weighed down by Amazon shares, ended the session green. Third-quarter reporting season has passed the halfway point, with 263 of the companies in the S&P 500 having reported. The S&P 500 posted 32 new 52-week highs and eight new lows; the Nasdaq Composite recorded 117 new highs and 115 new lows. Volume on U.S. exchanges was 11.26 billion shares, compared with the 11.53 billion average over the last 20 trading days.

☆ S&P 500, Nasdaq slide, while Dow ends higher on mixed earnings picture
▼ + stars: | 2022-10-27 | by ( Stephen Culp | ) www.reuters.com time to read: +5 min

That sent S&P 500 futures down 0.5% and Nasdaq futures down 0.6%, showing traders expect Wall Street to open lower on Friday. Among the 11 major sectors of the S&P 500, industrials had the biggest percentage gain, with communication services (.SPLRCL), weighed by Meta, down the most. Third-quarter reporting season forges ahead at full speed, with 227 of the companies in the S&P 500 having reported. Shares of Southwest Airlines Co (LUV.N) rose 2.7% after the carrier's quarterly profit topped consensus estimates. The S&P 500 posted 23 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 93 new highs and 119 new lows.

The benchmark 10-year Treasury yield fell to one-week lows as expectations of slower rate hikes gained after the Bank of Canada delivered a smaller-than-expected 50 basis point increase. Such hopes also come against the backdrop of economic indicators and corporate results suggesting that rapid increases to the borrowing cost is slowing the economic growth. Bets for a 50 basis point hike in December have increased to 55.3%, up from 47.4% a day ago, while the expectations for a 75 basis point hike have shrunk to 38.6% from 50.8%, according to CME's FedWatch tool. Visa Inc (V.N) jumped 5.2%, boosting the Dow, after the payments processor topped quarterly profit estimates on strong travel demand. The S&P index recorded 23 new 52-week highs and two new lows, while the Nasdaq recorded 73 new highs and 41 new lows.

☆ Wall St extends rally on signs of ebbing Fed rate hikes
▼ + stars: | 2022-10-25 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

The S&P 500 has reclaimed nearly 8% from the trough of its Oct. 12 close. Among the 11 major sectors of the S&P 500, all but energy (.SPNY) were green, with real estate stocks (.SPLRCR) enjoying the largest percentage gain. Third-quarter reporting season is firing all pistons, with 129 of the companies in the S&P 500 having reported. Analysts have set the bar low; aggregate S&P 500 earnings growth is now seen landing at 3.3% year-on-year, down from 4.5% at the beginning of the month, per Refinitiv. The S&P 500 posted 12 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 65 new highs and 108 new lows.

☆ U.S. stocks turn red as investors eye prolonged Fed hawkishness
▼ + stars: | 2022-10-20 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

Harker's comments also helped support the 10-year Treasury yield's march past 14-year highs. "Harper’s comments provided further confirmation that the Fed is all in on continued aggressive policy and future (interest) rate increases." The pan-European STOXX 600 index (.STOXX) rose 0.26% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.55%. Benchmark Treasury yields resumed their rise after economic data appeared to confirm the Fed is unlikely to relent in its aggressive campaign to rein in inflation. The Japanese yen weakened 0.10% to 150.05 per dollar, while Sterling was last trading at $1.1229, up 0.13% on the day.

☆ U.S. consumer prices increase more than expected in September; weekly jobless claims rise
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +3 min

People shop in a supermarket as rising inflation affects consumer prices in Los Angeles, California, U.S., June 13, 2022. The consumer price index rose 0.4% last month after gaining 0.1% in August, the Labor Department said on Thursday. Stubbornly high inflation and a tight labor market allow the U.S. central bank to maintain its aggressive monetary policy stance for a while. Some of the inflation pressures are coming from the tight labor market. The labor market remains tight.

☆ U.S. producer prices increase more than expected in September
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, Oct 12 (Reuters) - U.S. producer prices increased more than expected in September amid strong gains in the costs of services and goods, suggesting inflation could remain uncomfortably high for a while. The producer price index for final demand rebounded 0.4% last month, the Labor Department said on Wednesday. Data for August was revised lower to show the PPI falling 0.2% instead of dipping 0.1% as previously reported. Excluding the volatile food, energy and trade services components, producer prices also rose 0.4% in September. In the 12 months through September, the core PPI rose 5.6% after a similar increase in August.

☆ Morning Bid: Fed meets as dogs of war growl
▼ + stars: | 2022-09-21 | by ( ) www.reuters.com time to read: +2 min

Register now for FREE unlimited access to Reuters.com RegisterThe U.S. Federal Reserve building is pictured in Washington, March 18, 2008. REUTERS/Jason Reed/File PhotoSept 21 (Reuters) - A look at the day ahead in markets from Alun John. Investors were finally starting to turn all their attention to Wednesday's interest rate announcement from the Federal Reserve, when geopolitics popped up once again. read moreRegister now for FREE unlimited access to Reuters.com RegisterThe news sent investors rushing to safe havens. read moreAs well as the rate change, investors will also be examining the Fed's "Dot Plot" to see where policymakers expect rates to peak.

☆ U.S. two-year yield at almost 15-year high before Fed meeting
▼ + stars: | 2022-09-20 | by ( Herbert Lash | ) www.reuters.com time to read: +4 min

read moreYields on the benchmark 10-year Treasury shot up 11.1 basis points to 3.600%, having only topped 3.5% for the first time in 11 years on Monday. The two-year yield rose 4 basis points to 3.986%. The gap later narrowed to -39.0 basis points. The two- and 10-year yield inversion, when the short end is higher than the long end, often has been seen as a reliable predictor of a recession in a year or two. The yield on the 30-year Treasury bond was up 10.7 basis points to 3.612%.

☆ Treasury yields jump before Fed meeting, dollar gains
▼ + stars: | 2022-09-19 | by ( Herbert Lash | ) www.reuters.com time to read: +6 min

The higher yield helped strengthen the dollar and made gold less attractive as concerns about the economy in light of higher rates cooled risk taking. After the past three Fed meetings, there have been relief rallies in bonds and equities as markets interpreted Powell as being dovish. read moreThe two-year yield , a barometer of future inflation expectations, climbed to a fresh almost 15-year high of 3.970%. read moreThe dollar rose 0.21% against the yen , backing off from the 24-year peak of 144.99 two weeks ago amid increasingly strident intervention warnings from Japanese policymakers. The dollar index rose 0.055%, with the euro up 0.06% to $1.0021.

The higher rate helped strengthen the dollar and weaken gold prices as other central banks also are expected to hike rates this week. But a rally this time is unlikely when policymakers conclude a two-day meeting on Wednesday, he said. Markets also indicate a real chance that rates could hit 4.5% as the Fed is forced to tip the economy into a recession to subdue inflation. "Asset performance during this Fed tightening cycle is very different from the norm for other rate hike episodes," said David Chao, a global market strategist at Invesco. read moreChina's central bank went its own way though, and cut a repo rate by 10 basis points to support its ailing economy.

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