The U.S. Federal Reserve will once again be center stage for investors pretty much everywhere this week. The Fed will assuredly raise rates on Wednesday, but traders are already trying to figure out where the central bank goes from there.
Derivatives markets show that traders expect a 75 basis-point hike on Wednesday, another percentage point or so by the end of the year--and then a U-turn to cutting rates in 2023. Read all the details here.
Meantime, corporate earnings will be coming in, and investors will get more detail on the other big burning question: Is the U.S. economy headed for a recession?
Somewhat surprisingly, stocks have strengthened of late, benefiting from a decline in longer-term U.S. government bond yields despite the rising recession fears and a lackluster start to the second-quarter earnings season.
“This begs the intuitive question if a recession has been priced and the lows are in for stocks, or is the latest bounce simply a brief reversal in the broader bear-market trend,” Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets, wrote in a note to clients Monday.
Investors are also watching the U.S. dollar closely. Its relentless recent rise has been pressuring multinationals’ earnings, and Wednesday’s Fed meeting could be an important pivot point. Investors have been scooping up dollars in large part because they expect the Fed to raise rates much more than central banks in Europe and Japan, and Fed Chairman Jerome Powell’s post-meeting press conference could support or undermine that assumption.
Investors have been buying bonds of late, dragging down the 10-year Treasury yield to its lowest level since May. But, when the Fed has been raising interest rates in the past, the 10-year yield hasn’t usually peaked until the central bank has delivered its final rate increase, currently expected in December, according to a recent report from BofA Global Research.
Though recession fears have been boosting bonds, the BofA analysts led by rates strategist Ralph Axel warned Friday that a recession alone will not be enough to divert the Fed from its current course.
Rather, they wrote, it “will require a combination of a clear softening of the labor market, which is the Fed's most tangible target, and definitive signs of slowing inflation.”
"Trading" - Google News
July 25, 2022 at 11:01PM
https://ift.tt/NCjmnda
Stock Market News Today Live: Nasdaq Down, Dow Rises in Early Trading - The Wall Street Journal
"Trading" - Google News
https://ift.tt/2KxCLiE
https://ift.tt/oLj9Nwe
Bagikan Berita Ini
0 Response to "Stock Market News Today Live: Nasdaq Down, Dow Rises in Early Trading - The Wall Street Journal"
Post a Comment