(Bloomberg) -- The stock market is ending the week on a positive note, with solid indications that the world’s largest economy remains in good shape after the Federal Reserve’s aggressive tightening campaign.
Most Read from Bloomberg
While strong economic data also imply the Fed may not be so bold with rate cuts, the perception that officials will start easing policy this year is fueling risk appetite. A drop in Treasury volatility continued to bode well for the S&P 500’s most-influential group, with technology shares outperforming and putting the US equity benchmark on the brink of its all-time high.
As the earnings season continued to power on, traders awaited readings on consumer sentiment and housing. Fed Bank of Chicago President Austan Goolsbee said a continued decline in inflation would merit discussion of cutting rates, though he stressed the central bank will make decisions meeting-by-meeting. He spoke just hours before the Fed’s traditional pre-meeting communications blackout period.
The stocks that led the rally in 2023 are again traders’ top picks, according to Bank of America Corp.’s Michael Hartnett, who says investors are reverting to owning growth, technology, the “AI bubble” and the so-called Magnificent Seven. While US shares saw redemptions at $4.3 billion in the week through Jan. 17, tech-stock funds saw the biggest two-week inflow since August at $4 billion, BofA said, citing EPFR Global data.
“Bottom line, we’re off the bullish boil and the boat is less full, but it’s still leaning firmly positive,” said Peter Boockvar, author of the Boock Report.
The S&P 500 erased this week’s losses while the tech-heavy Nasdaq 100 outperformed after hitting a record Thursday. Treasury 10-year yields were little changed.
Markets are overpricing the pace and amount of Fed-rate cuts as they are overlooking stubbornly high inflation, according to economist Mohamed El-Erian.
“I do think that we get to the pivot, but relative to what the market expects, it won’t be as fast or as deep,” said El-Erian, president of Queens’ College, Cambridge, and a Bloomberg Opinion columnist.
Traders have tempered their wagers on rate cuts as US economic data continued to show resilience and Fed officials emphasized they want to ensure inflation is tamed before embarking on any cuts.
Two-year yields about matched those on 30-year bonds as of Friday morning in New York. As for Fed cuts, markets are now pricing in about 1.4 percentage points of reductions this year, compared with expectations of as much as 1.7 percentage points of easing as recently as last week. Meanwhile, March rate cuts that were largely baked into the market are now seen as more of a toss-up.
Policymakers penciled in three rate cuts in projections released after their December gathering. The Fed, which left interest rates unchanged last month, is anticipated to keep rates in a range of 5.25% to 5.5% for a fourth straight meeting when they convene Jan. 30-31.
Corporate Highlights:
Apple Inc. vowed to open up its coveted tap-to-pay technology on iPhones to rivals in a bid to sidestep potentially massive European Union antitrust fines.
Amazon.com Inc.’s proposed $1.4 billion acquisition of Roomba maker iRobot Corp. is expected to be blocked by the European Union’s antitrust regulator over concerns that the deal will harm other robot vacuum makers.
Ford Motor Co. cut production of its F-150 Lightning electric truck amid fading demand for electric vehicles.
Spirit Airlines Inc. said its deal with JetBlue Airways Corp. “remains in full force and effect” as the carrier explores ways to shore up its liquidity, offering investors a measure of relief after a court decision blocked the multibillion-dollar buyout.
J.B. Hunt Transport Services Inc. hauled more containers of freight than Wall Street expected in the fourth quarter, suggesting the sector may be recovering after a bad year.
SLB raised its payout to shareholders 10%, marking the highest dividend since 2020, as growth in drilling outside of North America buoyed results for the world’s biggest oilfield contractor.
Ally Financial Inc. announced fourth-quarter results that topped analysts’ estimates and said it will sell a point-of-sale financing business that includes $2.2 billion of loan receivables to Synchrony Financial.
Comerica Inc. said net interest income will probably slide 11% this year and reported a plunge in fourth-quarter profit on a series of one-time charges.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.3% as of 9:31 a.m. New York time
The Nasdaq 100 rose 0.5%
The Dow Jones Industrial Average rose 0.2%
The Stoxx Europe 600 fell 0.2%
The MSCI World index rose 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0874
The British pound fell 0.3% to $1.2668
The Japanese yen fell 0.1% to 148.32 per dollar
Cryptocurrencies
Bitcoin was little changed at $41,063.15
Ether rose 1% to $2,477.7
Bonds
The yield on 10-year Treasuries advanced two basis points to 4.16%
Germany’s 10-year yield was little changed at 2.34%
Britain’s 10-year yield was little changed at 3.94%
Commodities
West Texas Intermediate crude rose 0.5% to $74.48 a barrel
Spot gold rose 0.4% to $2,031.03 an ounce
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Farah Elbahrawy, Michael Mackenzie and Liz Capo McCormick.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
https://news.google.com/rss/articles/CBMiTGh0dHBzOi8vZmluYW5jZS55YWhvby5jb20vbmV3cy9hc2lhbi1zdG9ja3MtY2xpbWItbmFzZGFxLWhpdHMtMjIyMTM3ODY4Lmh0bWzSAQA?oc=5
2024-01-19 13:54:06Z
CBMiTGh0dHBzOi8vZmluYW5jZS55YWhvby5jb20vbmV3cy9hc2lhbi1zdG9ja3MtY2xpbWItbmFzZGFxLWhpdHMtMjIyMTM3ODY4Lmh0bWzSAQA
Tidak ada komentar:
Posting Komentar