We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The two-week rally off late-October lows seems to have cooled off this week, especially on the small-cap Russell 2000 but also on the S&P 500, which is now lower for the last trading month. Pre-market futures are up again today, but this is before Fed officials are given another microphone today to explain to everyone that the monetary policy body may not be done raising interest rates.
That’s been the main impetus of the rally, along with attractive valuations and a largely better-than-expected Q3 earnings season, which slows to a trickle over the coming two weeks or so. So throwing a wet blanket over bullish sentiment might have a hand in muting what many were excited to see: a late-year rally to bring all major indices into — or toward — the green.
Powell appeared at an IMF panel yesterday, and expressed the Fed is “not confident” that interest rates have been satisfactorily raised to curb inflation in the domestic economy. He stopped short of expressing the desire to add another 25 basis-point (bps) hike at the Fed’s last meeting of 2023 on December 12 and 13, but left the debate an open question going into 2024.
If his raison d’etre was to dampen market activity, he was only partially successful: the Dow is currently +120 points, the S&P is +18 and the Nasdaq +58 points at this hour. Even the beleaguered Russell is +8 points at the time of this writing. Today we’ll hear from Dallas Fed President Lorie Logan, Atlanta President Raphael Bostic and San Francisco President Mary Daly. Analysts will be keen to find any space between Powell’s comments yesterday and these Fed officials today.
Speaking of San Francisco, reports are that Chinese President Xi Jinping will be visiting the Golden City next Wednesday to meet with President Biden after several lower-level cabinet meetings between the two countries in China. Key among topics to be discussed is to loosen tensions between the top two economies on the planet, as trade animosity and the heating up of military conflicts in Ukraine and the Gaza Strip haver captured the attention of both leaders. Presumably, Biden and Xi will attempt to get on the same page going forward.
Some reports reflect a Chinese economy experiencing deflation currently, but are countered by better-than-expected performance from American companies doing business in China, such as Tapestry (TPR - Free Report) and MGM Resorts (MGM - Free Report) . That President Xi is actively involved in talks with the U.S. does suggest he is looking for a helping hand; it’s fair to say not everything in China is peachy these days. But the makeup of the country’s government and the less-than-transparent business practices make it difficult to reach strong conclusions.
Next week will bring us the latest Consumer Price Index (CPI) report for October, where month-over-month levels are expected to even out or come down a tad, and year-over-year figures — especially on the “core” print — eye potentially the first “3-handle” in recent memory. The previous month’s core CPI year over year reached +4.1%, marking the 11th lower read of the previous 12 months. If the Fed is looking for more proof its current interest-rate levels are indeed curbing inflation in the U.S. economy, this will be a good place to look. Questions or comments about this article and/or author? Click here>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Pre-Markets Higher After Winning Streaks Break
The two-week rally off late-October lows seems to have cooled off this week, especially on the small-cap Russell 2000 but also on the S&P 500, which is now lower for the last trading month. Pre-market futures are up again today, but this is before Fed officials are given another microphone today to explain to everyone that the monetary policy body may not be done raising interest rates.
That’s been the main impetus of the rally, along with attractive valuations and a largely better-than-expected Q3 earnings season, which slows to a trickle over the coming two weeks or so. So throwing a wet blanket over bullish sentiment might have a hand in muting what many were excited to see: a late-year rally to bring all major indices into — or toward — the green.
Powell appeared at an IMF panel yesterday, and expressed the Fed is “not confident” that interest rates have been satisfactorily raised to curb inflation in the domestic economy. He stopped short of expressing the desire to add another 25 basis-point (bps) hike at the Fed’s last meeting of 2023 on December 12 and 13, but left the debate an open question going into 2024.
If his raison d’etre was to dampen market activity, he was only partially successful: the Dow is currently +120 points, the S&P is +18 and the Nasdaq +58 points at this hour. Even the beleaguered Russell is +8 points at the time of this writing. Today we’ll hear from Dallas Fed President Lorie Logan, Atlanta President Raphael Bostic and San Francisco President Mary Daly. Analysts will be keen to find any space between Powell’s comments yesterday and these Fed officials today.
Speaking of San Francisco, reports are that Chinese President Xi Jinping will be visiting the Golden City next Wednesday to meet with President Biden after several lower-level cabinet meetings between the two countries in China. Key among topics to be discussed is to loosen tensions between the top two economies on the planet, as trade animosity and the heating up of military conflicts in Ukraine and the Gaza Strip haver captured the attention of both leaders. Presumably, Biden and Xi will attempt to get on the same page going forward.
Some reports reflect a Chinese economy experiencing deflation currently, but are countered by better-than-expected performance from American companies doing business in China, such as Tapestry (TPR - Free Report) and MGM Resorts (MGM - Free Report) . That President Xi is actively involved in talks with the U.S. does suggest he is looking for a helping hand; it’s fair to say not everything in China is peachy these days. But the makeup of the country’s government and the less-than-transparent business practices make it difficult to reach strong conclusions.
Next week will bring us the latest Consumer Price Index (CPI) report for October, where month-over-month levels are expected to even out or come down a tad, and year-over-year figures — especially on the “core” print — eye potentially the first “3-handle” in recent memory. The previous month’s core CPI year over year reached +4.1%, marking the 11th lower read of the previous 12 months. If the Fed is looking for more proof its current interest-rate levels are indeed curbing inflation in the U.S. economy, this will be a good place to look.
Questions or comments about this article and/or author? Click here>>