Good morning, traders!
The S&P 500 ($SPY) is trading above yesterday’s close. Let’s get into it…
U.S. stock ticked higher on Thursday, following a statement from the Federal Reserve that hinted at a possible easing of interest-rate policy by 2024. This optimistic outlook comes after the Dow Jones Industrial Average hit a record high. Futures linked to major indexes like the Dow, S&P 500, and Nasdaq all indicated rises at the opening bell. The positive trend is a reaction to the Federal Reserve’s Open Market Committee maintaining its key policy rate, which is currently the highest it has been in over two decades.
The Federal Reserve’s recent “dot plots,” a summary of economic projections, suggested a potential decrease in the federal funds rate by 0.75 percentage points next year. This marks a significant shift from their previous stance of maintaining higher rates for a longer period. Bill Adams, the chief economist for Comerica Bank, highlighted that the Federal Reserve is likely to keep rates stable in the near term. However, there’s growing speculation about a rate cut in the next six months, especially after Federal Reserve Chair Powell mentioned that rate cuts were discussed in their latest meeting.
The stock market responded positively to these developments, with US stock futures gaining and the Dow reaching a new all-time high. Investors were encouraged by the Federal Reserve’s indication of not planning further rate hikes and the possibility of rate cuts next year. This shift in policy is seen as a response to expectations of reduced inflation and stable unemployment rates. Additionally, the bond market reacted favorably, with yields on 10-year Treasury notes falling below 4% for the first time since August.
On the global front, central banks in other countries also made key decisions, with the Bank of England, Swiss National Bank, and the European Central Bank keeping their interest rates steady. In contrast, Norway’s central bank unexpectedly raised its benchmark rate. In the corporate sector, Adobe’s shares saw a decline in premarket trading due to a less optimistic sales outlook and concerns over US antitrust investigations into its subscription cancellation policies. These corporate and global financial updates, along with upcoming reports on jobless claims and retail sales, are closely watched for further insights into the health of the US economy.
Thursday Economic Events:
Initial Jobless Claims 8:30am ET – High Volatility Expected
Retail Sales 8:30am ET – High Volatility Expected
Import and Export Prices 8:30am ET
Business Inventories 10:00am ET
EIA Natural Gas Report 10:30am ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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