The S&P 500 has already recovered about 8% from its closing low on Oct. 12. “There is a growing discussion about a light at the end of the tunnel for Fed rate hikes,” said Bill Merz, head of capital markets research at US Bank Wealth Management in Minneapolis.
Merz also warned that it would not be known for some time whether the highest inflation in decades was “heading decisively toward the Fed’s target.”
“We’re seeing a little bit of relief in the dollar and long-term bond yields have come down a little bit,” Merz added. “Those factors combine to give rise to a small rebound.”
Yields on 10-year Treasury bonds rose on hopes the Federal Reserve could begin to ease its uphill battle against inflation.
A mixed mix of earnings and dovish forecasts, generally negative for the markets, suggested that the barrage of interest rate hikes by the Fed is beginning to be felt, raising hopes that the central bank may reduce the size of the rate increases after your Nov. 1 statement.
Data on Tuesday showed a slowdown in home price growth and a deterioration in consumer confidence. These signs of economic weakness, which are generally not supportive of risk appetite, are evidence of the Fed’s easing of its hawkish line.
The third-quarter reporting season is hitting the market, with 129 of the companies in the S&P 500 reporting results. Of these, 74% exceeded consensus expectationsaccording to Refinitiv.
Source: Ambito
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