Investors now have to accept the possibility of fewer rate cuts from the Federal Reserve this year, said Brad Conger, chief investment officer at Hirtle, Callaghan & Co.
Wall Street falls this Friday after major US banks kicked off corporate earnings season, while inflation and geopolitical concerns weigh on investors. Thus, the Dow Jones Industrial Average gives up 0.8%. The S&P 500 fell 0.9%, while the Nasdaq Composite fell 1%.
So far this week, the broad market index and the 30-stock Dow are down 1% and 1.9%, respectively. Meanwhile, the Nasdaq, with a high technological componentregisters an increase of 0.1%.
JPMorgan Chase shares fell more than 5% after it released its first quarter results. The giant said net interest income, a key measure of what it earns through lending activities, could be slightly below what Wall Street analysts expect in 2024. CEO Jamie Dimon also warned of persistent inflationary pressures affecting the economy.
Wells Fargo shares also fell 0.6% after reporting their latest quarterly numbers. Citigroup falls more than 2% despite reporting an increase in revenue.
Higher for longer? Investors recalculate
The consumer confidence index for April came in at 77.9, below the Dow Jones consensus of 77.9, according to the University of Michigan Consumer Surveys. Short- and long-term inflation expectations also rose, reflecting frustration with persistent inflation.
Investors now have to accept the possibility of fewer rate cuts from the Federal Reserve this year, said Brad Conger, chief investment officer at Hirtle, Callaghan & Co.
“We have lost the immediate benefit of the planned rate cuts. The market is saying that interest rates are not favorable now, but you still have earnings to rely on,” Conger said.
Source: Ambito
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