The longest rally in Wall Street in two years he faces his toughest test to date, when the chairman of the Federal Reserve, Jerome Powellspeaking later from Washington.
US stocks fall this Thursday, potentially challenging the New York stock’s longest winning streak since 2021, amid a pullback in Treasury yields linked to bets that the Federal Reserve is reaching the end of its rate hike cycle. Thus, the Dow Jones Industrial falls 0.3; the S&P 500, 0.1% and the Nasdaq 100, 0.3%.
Shares have risen in each of the last eight sessions, longest winning streak since 2021so a positive closing this Thursday would mark the best series of earnings since 2004. Another move higher on Friday would take the streak to nineteen ninety five.
Much of the streak has occurred in the middle of a sharp decline in forecasts Fed rate hike with CME Group’s FedWatch indicating no more than a 22% chance of another move higher in the Fed Fund ratewhich currently stands between 5.25% and 5.5%, in the next five meetings.
The odds of a rate cut, however, have risen to 41.1%, set for the June meeting, with expectations of further cuts during the summer months.
Wall Street and the markets in suspense
However, the Fed chairman, Jerome Powellmight challenge that consensus later todaywhen speaking as part of a debate on monetary policy at the Jacques Polak Annual Research Conference in Washington.
Should Powell deliver a hawkish speech today, noting that inflation remains high and job creation and economic growth remain strong, could trigger a sharp pullback in both markets heading into the final trading days of the week.
10-year bond yields, which fell below 4.5% for the first time since early September in the overnight session, are trading at 4.561% this Thursday following a mixed auction of $40 billion in new bonds on Wednesdaywhich attracted strong foreign interest but weaker overall demand.
Today, the Treasury will hold the third of the first three enhanced auctions under its new financing commitment, with the sale of $24 billion in 30-year bonds.
Ahead of Powell’s speech this afternoon, Markets will closely monitor the release of the Labor Department’s weekly jobless claims data.which showed that about 217,000 Americans applied for new unemployment benefits last week, down from the previous figure of 220,000, as hiring continues to cool in the fall months.
Markets will also digest the impact of a number of technology and media-related earnings this session, including a mixed fourth-quarter report from Disney (DIS) – Get Free Report, chipmaker Arm Holding’s first formal updates since going public earlier this year, video game maker Take-Two Interactive (TTWO) – Get Free Report and movie theater chain AMC Entertainment (AMC) – Get Free Report.
Source: Ambito
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