Bad news is cheered. Good news makes investors nervous. Welcome to Wall Street. The S&P 500 rose above 3,000 for the first time in its history Wednesday, with gains that continued early Thursday. The most recent jump began after Federal Reserve chair, Jerome Powell, suggested the nation’s central bank was worried about the economy. Just days earlier, strong data on the job market had the opposite effect for stocks. This counterintuitive reaction to the news is a phenomenon that’s explained by expectations for interest rates. The weakening outlook for the economy means, in all likelihood, borrowing costs are coming down — and in the right circumstances, this can be good for stocks. If that all sounds familiar, there is good reason. Those same conditions were in place for much of 2012 to 2015, when the S&P 500 rose nearly 45 percent. That climb earned itself a nickname, the TINA market. It stands for There Is No Alternative, which simply means that because … [Read more...] about As Wall Street rallies to fresh highs, investors are uneasy
Feds raise rates today
US Fed pushes back on aggressive US rate cut expectations
NEW YORK (REUTERS) - US Federal Reserve officials on Tuesday (June 25) pushed back on market expectations and presidential pressure for the central bank to deliver a significant US interest rate cut of half a percentage point as soon as its next meeting. Chairman Jerome Powell defended the central bank's independence from President Donald Trump and financial markets, both of which seem to be pushing for aggressive rate cuts, in remarks at the Council on Foreign Relations in New York. "The Fed is insulated from short-term political pressures," said Powell. Asked later about the possibility of disappointing markets by not delivering a cut, Powell added, "We're not in the business, really, of trying to work through short-term movements in financial conditions. We have to look through that." But he said he and his colleagues are currently grappling with whether uncertainties around US tariffs, Washington's conflict … [Read more...] about US Fed pushes back on aggressive US rate cut expectations
European stock markets hold their breath before Fed update
LONDON: European stock markets on both sides of the Atlantic paused on Wednesday (Jun 19) after the previous session's strong rally, as investors awaited a key monetary policy update from the Federal Reserve.The dollar was downbeat against its main rivals, while oil prices were volatile after strong gains on Tuesday.Major crude-producing countries, including Saudi Arabia and non-OPEC members like Russia, on Wednesday said they would meet in Vienna at the beginning of July to decide on whether to prolong output cuts.US and European equity markets had rallied on Tuesday - and Asian indices playing catch-up jumped on Wednesday - on two investor-friendly developments: upbeat comments from the US and China on trade before the G20 Summit, and an ECB statement hinting at a eurozone interest-rate cut."European markets are taking a breather in the wake of yesterday's huge gains across the globe," noted Joshua Mahony, senior market analyst at IG trading group.Wall Street was "near the … [Read more...] about European stock markets hold their breath before Fed update
Traders pile into bets on Fed interest-rate cuts this year
Business The Federal Reserve is just about done being patient. 07 Jun 2019 09:31PM Bookmark REUTERS: The Federal Reserve is just about done being patient.That was the view of traders in short-term interest rate futures Friday, after a government report showed U.S. employers sharply slowed hiring in May.Traders jumped on the report as a sign of a cooling labor market that would force the Fed to start cutting its policy rate in July and reduce it twice more by the end of the year.Bets for two rate cuts had been priced into the market, mostly in reaction to mounting trade tensions that are expected to slow economic growth.The U.S. central bank, which raised interest rates four times last year, signaled earlier this year it is on hold for the rest of 2019, saying it will be patient in assessing economic data."Today's report certainly supports the case for the Fed to cut interest rates sooner rather than later," said Russell Price, chief economist at Ameriprise Financial Services … [Read more...] about Traders pile into bets on Fed interest-rate cuts this year
Bull markets don’t die of old age
Bull markets don’t die of old age PHILEQUITY CORNER - Wilson Sy (The Philippine Star) - April 29, 2019 - 12:00am After a disappointing 2018, the year 2019 has proven to be a good year for global stock markets. Last Friday, the S&P 500 and Nasdaq both hit new all-time highs. On April 26, the S&P 500 hit a record close of 2940, while the Nasdaq ended the day at 8140. Above forecast 1Q19 US GDP growth and strong earnings from some corporates, especially tech heavyweights, gave US equity indices the impetus they needed to notch new milestones. This proves that trying to measure bull markets according to seven or 10-year cycles does not work. The historic highs last week show that bull markets don’t die of old age. Near death experience before new highs Just last December, it would be hard to imagine that US stocks would make new highs this year. In December 2018, the US stock market experienced the worst … [Read more...] about Bull markets don’t die of old age