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Indexes rallied to record highs as investors cheered Wednesday's rate cut from the Fed. Jobless claims reinforced the Fed's message of a strong labor market, with last weeks's claims down 12,000. AdvertisementMajor stock indexes surged to record highs on Thursday, a day after a jumbo rate cut from the Federal Reserve. On Wednesday, the Fed cut interest rates for the first time in four years, slashing its benchmark rate by 50 basis points. The Fed's dot plot shows the central bank will likely cut another 50 basis points this year and 100 basis points next year.
Persons: , Dan Ives, Ives, Jerome Powell, Powell, Richard Bernstein Organizations: Fed . Tech, Nvidia, Meta, Service, Federal Reserve, Dow Jones Industrial, Nasdaq, Broadcom, ASML, Labor Department, Treasury, Fed, Trump Media Locations: Here's
But after Wednesday's big 50 basis point cut, Lee says he sees uncertainty looming ahead of the election. AdvertisementProminent stock market bull Tom Lee has long called for a big rally after the Federal Reserve cuts interest rates. But after a big 50 basis point cut on Wednesday, Lee says he's feeling cautious ahead of the November election. That rally would happen regardless of a 25 or 50 basis point cut, he said, if the Fed suggested future cuts are likely. With election-related volatility ahead, Lee recommends investing in cyclical stocks in areas like industrials, financials, and small caps.
Persons: Tom Lee, Lee, , SoFi's Liz Young Thomas Organizations: Federal Reserve, Service, Fundstrat Global Advisors, CNBC, Fed, Business
The Marriner S. Eccles Federal Reserve building in Washington, DC, on June 25. Ting Shen/Bloomberg/Getty ImagesAfter all the hype that’s been brewing for over a year, you might think that once the Federal Reserve finally cuts interest rates the economy will look and feel completely different. Sure, the stock market could have some big swings the second the Fed releases its interest rate decision at 2 pm ET on Wednesday and when Fed Chair Jerome Powell speaks a half hour later. Mortgage rates and the interest rates Americans pay on a variety of loans will quickly drop as well. That’s because when the Fed lowers or raises rates, it takes a while for the full effect of those moves to be felt across the economy.
Persons: Ting Shen, there’s, Jerome Powell, Milton Friedman, Read Organizations: Eccles Federal Reserve, Bloomberg, Federal Reserve, Fed Locations: Washington ,
What a Fed rate cut could mean for the world
  + stars: | 2024-09-18 | by ( Jenni Reid | ) www.cnbc.com   time to read: +4 min
watch nowThe U.S. Federal Reserve is on Wednesday heading for its first interest rate cut since the onset of the Covid-19 pandemic — and despite the move being widely forecast, global investors are braced for impact. Global impactA key concern is the pressure interest rate differentials put on currencies. Oil and other commodities, usually priced in dollars, often receive a boost with a rate cut as a lower cost of borrowing can stimulate an economy and increase demand. "Interest rate cuts reduce the cost of borrowing in U.S. dollars, thereby creating easier liquidity conditions for companies around the world," Quilter Cheviot's Richard Carter continued via email. That includes whether the initial cut will reduce the Fed funds rate by 25 basis points or 50 basis points below its current 525 to 550 range.
Persons: , Richard Carter, Cheviot, Cheviot's Richard Carter Organizations: U.S . Federal, Turkish, U.S ., Fed, Federal, Equity Locations: U.S, Canada, Mexico, Switzerland, Sweden
Vice President Kamala Harris called the rate cut “welcome news,” while former President Donald Trump suggested, without evidence, that the decision could be politically motivated. With less than 50 days until Election Day, another question has emerged: Will the rate cut matter to voters? In fact, they already have – mortgages are based on bond yields, which have fallen in recent weeks in anticipation of a rate cut. Harris responded to the rate cut by saying she’s focused on bringing down prices. This story has been updated with reaction to the Fed’s rate cut announcement.
Persons: Biden, Joe Biden, Ukraine —, , , , ” Biden, Kamala Harris, , Donald Trump, Zoila Sanchez, CNN’s John King, ” Sanchez, King, ” Homebuyers, Powell, Jason Furman, Barack Obama’s, “ It’s, ” Furman, George H, Bush, Bill Clinton’s “, , Clinton, Aaron Klein, ” Klein, Harris, she’s, Trump, they’re, ” Trump, Steve Moore, Powell sanctimoniously, ” Moore, ” Powell, Moore Organizations: CNN, Reserve, White House, Economic, of Washington, Financial, St, Louis Federal Reserve, Brookings Institution, , Biden, Fed, SPAN Locations: trillions, Ukraine, Nevada, New York
Millennials and Gen Z are increasingly shopping at discount stores like TJ Maxx, Burlington, and Ross. AdvertisementGen Z wants more bang for their buck, and their love of a good deal could drive shares of some discount retailers up nearly 20%, Bank of America says. AdvertisementThe report from BofA on Wednesday attributes the rise in popularity among discount stores to inflation weariness. The analysts see Burlington and Ross Stores shares rising 16% and 18% from Wednesday highs, respectively. "Off-price has attracted the customer, helped by the quest for value amidst persistent multi-year inflation pressures," Bank of America's analysts wrote.
Persons: Millennials, TJ Maxx, Ross, , Ross . Younger Organizations: Service, Bank of America, TJ Maxx, Goods, Burlington, Ross Stores, Bank of Locations: Burlington, Millennials, BofA
That's because the Fed wants a "healthy economy," a big component of which is a strong stock market, he said. AdvertisementThe "Fed put" is back, and stock investors may not be fully pricing in the good news, according to Fundstrat's head of research Tom Lee. The prominent stock bull pointed to the idea that central bankers could move to further ease monetary policy at any sign of weakness in the stock market. AdvertisementA healthy economy, though, hinges on consumer and business confidence, which is largely tied to the stock market, Lee said. We could be seeing turbulence for the next 8 weeks, but this is also in the context of a very strong stock market in 2024," he added.
Persons: Tom Lee, That's, , Lee, There's Organizations: Fed, Service, Wednesday
This story is available exclusively to Business Insider subscribers. Jason Redmond/AFP/Getty ImagesA good chunk of the executives Darius highlighted aren't involved in OpenAI's tech. Some of OpenAI's most high-profile executives are instead addressing legal challenges and lobbying regulators in the US and abroad. It's a nod to the fact OpenAI's biggest upcoming fights will take place in a courtroom as opposed to a computer screen. Luckily for you, Business Insider has identified the most famous book set in every state.
Persons: , Tyler Le, Sam Altman, Altman, he's, Darius Rafieyan, OpenAI, Darius, it's, Jason Redmond, aren't, It's, Justin Trudeau's, Somodevilla, Warren Buffett, David Einhorn, Chelsea Jia Feng, Amazon's, Natalie Ammari, Harris, Jamie Dimon, Dimon, Harvey Weinstein, world's, Dan DeFrancesco, Hallam Bullock, Milan Sehmbi, Amanda Yen Organizations: Service, Business, Apple, Getty, OpenAI, BMO Capital Markets, Healthcare, Amazon, Google, Trump, Facebook, Reading, Fed, The Locations: AFP, New York, London
US indexes edged higher as investors waited for a likely interest rate cut from the Fed. AdvertisementUS stocks rose on Wednesday as traders readied for what's likely to be the Federal Reserves's first rate cut in four years. "Though consensus is leaning toward a 50 basis point move, we look for the Fed to cut by 25 basis points today. AdvertisementFollowing the interest rate decision, all eyes will be on Fed Chair Jerome Powell, who will deliver prepared remarks during a press conference. "While the market has usually bounced immediately following the 2 PM rate decision, the sell-off usually starts at or near the end of Powell's post-FOMC press conference."
Persons: Jerome Powell's, , John Lynch, José Torres, Jerome Powell, Powell, shouldn't Organizations: Fed, Traders, Service, Federal, Comerica Wealth Management, Interactive, Deutsche Bank, Investment
The Fed just issued its first interest rate cut in four years. AdvertisementStocks got a brief leg up to a new intraday record on Wednesday after the Federal Reserve issued its first rate cut since 2020. "The Fed has given the market what it was looking for with the bigger 50-basis point rate cut," Joel Kruger, market strategist at LMAX Group said in a statement. Here's where US indexes stood at the 4 p.m. closing bell on Wednesday:AdvertisementStocks have historically reacted well to Fed rate cuts. "All we needed today was for Powell to validate market expectations that the Fed is acknowledging the downside risks to the labor market and responding appropriately."
Persons: Stocks, , Jerome Powell's, Joel Kruger, Morgan Stanley, Kruger, Tom Lee, Priya Misra, Powell, Jason Pride Organizations: Service, Federal Reserve, LMAX, JPMorgan Asset Management Locations: Glenmede
Last week, markets expected a quarter-point rate cut and were just happy that the Fed was starting the cutting cycle. .SPX YTD mountain S & P 500, YTD And fed funds futures now point a majority of traders seeing a half point cut. Even though most Fed officials and economists believe the central bank would start with a quarter point. But now we've gone from that fear to expecting a half point. On the other hand, the JPMorgan traders think that a cut of a quarter point would "add to market uncertainty," meaning that we probably shouldn't expect the market to keep building on its all-time highs with a quarter point.
Persons: wouldn't, Michael Feroli, CNBC's Organizations: Federal Reserve, Dow Jones, JPMorgan
From property woes to sluggish economic data, China appears to be suffering from long Covid. Wall Street turns bullishBillionaire investors, including Appaloosa Management founder David Tepper and "Big Short" investor Michael Burry, recently revealed they are sticking to their China bets. The famed investor loaded up on Alibaba stock in the second quarter, revealing an $11.2 million position in the company. That makes Alibaba Burry's largest holding, with other Chinese tech stocks including Baidu and JD.com also featuring on Burry's portfolio. Meanwhile, BCA Research recently upgraded Chinese onshore stocks to overweight, with China strategist Jing Sima expecting Chinese onshore stocks to passively outperform global equities.
Persons: Jiang Sheng, It's, Ted Alexander, CNBC's, David Tepper, Michael Burry, Alibaba, Tepper, Burry, JD.com, Jing Sima, George Boubouras, Goldman Sachs, Song Zhiyong, Eric Lin Organizations: Visual China, Getty, Appaloosa Management, KE Holdings, Baidu, BCA Research, K2 Asset Management, CNBC, Bank of America, National Bureau of Statistics, China's Ministry of Transport, Civil Aviation Administration, Asia Pacific Summit for Aviation Safety, Paris Olympic Games, Greater, Greater China Research, UBS Locations: China, Beijing, Wall, Japan, South Korea, Singapore, Europe, Greater China
Employers know that prioritizing employee wellbeing is the right thing to do, but there are also business benefits. Investing in work wellbeing does more than improve employee morale — it can also drive tangible business benefits. Oxford recently analyzed Indeed's work wellbeing dataset and highlighted a strong correlation between company wellbeing and business performance. Moreover, the Indeed-Oxford research reveals the long-term business benefits of prioritizing employee wellbeing. Indeed further strengthened the business case for work wellbeing with the launch of the Work Wellbeing 100, an index ranking the top 100 publicly traded companies by their Indeed Work Wellbeing Score.
Persons: Russell, — LaFawn Davis, Davis Organizations: Oxford, University of Oxford, Nasdaq, Forrester Research, Companies, Insider Studios Locations: Oxford, millennials
For the first time in the 2024 election cycle, Vice President Kamala Harris is viewed as more likely than former President Donald Trump to win the U.S. presidential election, according to a CNBC Fed Survey released Tuesday. Among the group, 48% see a Harris victory as the most likely scenario, while 41% believe Trump will win. Fifty-six percent of respondents to the CNBC Fed Survey believe a Trump presidency would be better for the stock market than a Harris administration. The respondents also forecast that Harris' economic proposals would be better for budget deficits and trade policy. They gave higher marks to Trump for how his policy proposals would impact business regulation, inflation, jobs and taxes.
Persons: Kamala Harris, Donald Trump, Harris, Trump, Joe Biden, Biden, Joel Naroff Organizations: White House, U.S, CNBC Fed, Biden, CNBC Fed Survey, Trump, Naroff Locations: Washington, Bedminster , New Jersey, United States
Speaking to CNBC in an exclusive interview, Reserve Bank of India (RBI) Governor Shaktikanta Das discussed the issue of slowing growth in bank deposits underperforming an expansion in loans. "So there is a gap of 350 to 400 basis points," he said, referencing the difference between credit and deposit growth. Annual figures from August put loan growth at 13.6% with deposit growth at 10.8%, according to Reuters. When lending outpaces deposits, net interest margins — or the difference between what a bank earns on loans and pays out for deposits — take a hit. India's GDP slowed to 6.7% in the second quarter compared to last year's 8.2%, piling pressure on the central bank to reverse a recent hiking cycle.
Persons: Shaktikanta Das, Das, Ashish Gupta, CNBC's Organizations: CNBC, Reserve Bank of India, Reuters, Mutual Fund, Monetary, MPC Locations: India
In recent weeks, more stocks are participating in the market's move to record or near-record highs. "Market breadth breakouts support the bullish case," Bank of America technical analyst Stephen Suttmeier said in a 29-page report Monday. Suttmeier relied on the advance/decline line , a measure of the number of stocks rising in price on a given day versus the number of stocks that have fallen in price, for his analysis. Advancers also beat decliners on the Nasdaq Stock Market by about 2,500 to 1,000, or a ratio of 2.5 to 1. "Strong advance-decline (A-D) lines show solid market breadth [and] suggest a 'rotational' versus 'toppy' trading pattern since July," Suttmeier told clients.
Persons: Stephen Suttmeier, Suttmeier, Advancers, decliners Organizations: Bank of America, New York Stock Exchange, Nasdaq, U.S, NYSE Locations: U.S
Stocks pushed higher as positive retail sales surprised investors. All eyes are on the Federal Reserve's likely interest rate cut on Wednesday. AdvertisementStocks moved higher after stronger-than-expected US retail sales boosted confidence in consumer health, as the Federal Reserve's two-day policy meeting is set to kick off. Retail sales increased 0.1% last month, compared to consensus estimates of a 0.2% decline. Strong retail sales suggest that the Fed does not necessarily have to hurry with larger cuts, as the consumer economy appears intact for now.
Persons: Stocks, , That's, Scott Helfstein Organizations: Service, Federal, Investment, Global
Shu Matsuo Post, 38, built a $2 million real estate portfolio, according to documents seen by CNBC Make It. Over the course of about seven years, the 38-year-old consistently poured over 50% of his and his wife's dual income into real estate investing. Beginning of real estate investing journeyMatsuo Post's journey toward financial independence was not straightforward. Pivoting his career multiple times, he worked in industries like journalism, retail and technology before entering real estate. "We found real estate and kept talking about it, and then we decided that we can live off of one income," Matsuo Post said.
Persons: Shu Matsuo, Matsuo, it's, Matsuo Post, Christina, I'm, that's Organizations: CNBC, Matsuo Post, FI, YouTube Locations: U.S, Japan, Hong Kong, Minnesota, New York
The S & P 500 touched a record high on Tuesday , bringing its year-to-date gain to more than 18%. The S & P 500 averaged a 5.5% gain in the first three months after an initial cut, 10.6% six months later and 11.3% one year out. On average, the broader index jumped 10.2% three months later, 14.7% six months out and 18.6% one year afterward. .SPX YTD mountain S & P 500, ytd Other investment banks have noted this discrepancy, with Bank of America Securities also highlighting the pattern in a recent note. The worst-performing sectors 12 months after a rate cut were materials, utilities and consumer discretionary.
Persons: Canaccord, Ohsung Kwon, Canaccord Genuity, — CNBC's Gabriel Cortes Organizations: Federal Reserve, Bank of America Securities
Tuesday's retail sales data boosted soft landing outlooks. AdvertisementIndexes were mixed on Tuesday with investors still split on the potential size of an interest rate cut, with less than 24-hours to go before the Federal Reserve announces its policy decision. Unanticipated strength in Tuesday's retail sales data convinced investors that the economy remains robust, and the S&P 500 briefly hit a record high before paring gains. Bond yields edged up ahead of the Fed decision, nodding to the possibility that the odds of a jumbo rate cut fell after retail sales surprised to the upside. AdvertisementStrong retail sales suggest that the Fed does not necessarily have to hurry with larger cuts, as the consumer economy appears intact for now.
Persons: , LPL, Jeffrey Roach Organizations: Service, Federal Reserve, bitcoin, Treasury
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Muted session: U.S. stocks were flat Tuesday after the S & P 500 briefly made a new all-time high in the session. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB.
Persons: Jim Cramer, hasn't, We're, Marc Benioff, Mills, Jerome Powell, Jim Cramer's, Jim, Kevin Mohatt Organizations: CNBC, Procter, Procter & Gamble, Jim Cramer's Charitable, U.S . Federal, Federal, Committee Locations: Procter &, San Francisco, Washington , U.S
Like the overall market, Microsoft has been running higher of late as odds increasingly favor a 50-basis-point Fed cut. With so much hope on Wall Street, if the Fed were to go with a smaller 25-basis-point move, the market could get hit and pressure Microsoft stock. The Club has a $500 per share price target on Microsoft stock. That's our fundamental case, which aligns with technical analysis of Microsoft's one-year stock chart pattern. A laptop computer with Microsoft Copilot+ installed is on display at the Best Buy store on June 18, 2024 in Miami, Florida.
Persons: Amy Hood, we've, Jim Cramer's, Jim Cramer, Jim, Joe Raedle Organizations: Microsoft, Fed, CNBC, Getty Locations: Miami , Florida
1 for employee wellbeing, according to the 2024 Work Wellbeing 100 from Indeed and the University of Oxford's Wellbeing Research Centre. Indeed's ranking found that companies with higher work wellbeing scores also have higher valuations, returns on assets and profits. "A lot of these companies tend to prioritize work flexibility," says Kyle M.K., a talent strategy advisor at Indeed. "Companies that provide choice are the ones that tend to have a much better reputation among their employees," M.K. "By prioritizing work wellbeing, companies cultivate a more resilient, effective and happier workforce which ultimately drives business growth."
Persons: Kyle M.K, LaFawn Davis, Indeed's Organizations: University of Oxford's, Research, Nasdaq, Companies, Block, Human, Delta Air Lines, Accenture Nike, International Disney Parks, Flex, Walt Disney Company Wipro, Vans, Technology Solutions, Bros Coffee Microsoft FedEx Freight, CNBC
Analysts are increasingly recommending defensive stocks to blunt the impact of an economic slowdown. The S&P 500's consumer staples sector has risen more than 4% in the last month. AdvertisementAmid fears of a recession and increased market volatility, analysts have been pointing to defensive stocks as a safe bet to hedge macro risk. Among defensive sectors — which include things like real estate and financials — investors recently have been pouring into consumer staples in particular. With the Federal Reserve likely to finally cut rates at its meeting this week, defensive stocks could be poised for further growth.
Persons: , Morgan Stanley's, Mike Wilson, Wilson, that's, Savita Subramanian, Subramanian Organizations: Service, Retailers, Walmart, Target, Bank of America, P Global Semiconductor, Financial Times, Bloomberg, Federal Reserve Locations: cyclicals
We expected there to be a cooling labor market — that's kind of the goal — and it's always just, you know, how cool?" That being said, when it comes to the labor market … it is, in fact, so over. That's an improvement over July's 4.3% unemployment rate, but overall, the jobs market in the US is cooling off. Related stories"If you imagine a labor market like a bathtub, the bathtub is full," said Dana Peterson, the chief economist at the Conference Board. Despite the strong labor market, they're sending endless résumés into the ether without getting any bites, and they don't understand why.
Persons: I've, it's, Allison Shrivastava, Joanne Hsu, there's, Dana Peterson, Jaime, Alexis Fowler, she'd, That's, pang, Hsu, Michael Madowitz, Y, Peterson, We're, Emily Stewart Organizations: Federal, University of Michigan, Conference Board, Roosevelt Institute, Business
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