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\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

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ADVERTISEMENT
\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

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Follow The Distributed

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\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

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\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

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\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2 3 4 5 … 12

Most Read

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Follow The Distributed

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\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n
\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Ryan Detrick, chief market strategist at the Carson Group said that positive second-quarter earnings and benign inflation data could encourage more rotation from tech to sectors that have lagged this year and he does not expect that \"bears\" will take control of the market movement. BofA Securities equity and quant strategist Jill Carey Hall noted last week that while BofA's private clients continued buying equities, hedge funds and institutional clients were selling. This behavior might indicate profit-taking rather than an anticipation of a market correction.<\/p>\n\n\n\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Specific periods when the bull-bear spread plunged into negative territory, such as December 2018 and March 2020, did a very good job of signaling extreme bearishness that occurred around major market lows. Currently, the S&P 500, at approximately 5,470, is just below its record intraday high of 5,505.53 and traders are closely watching the bull-bear spread in case it continues to worsen.<\/p>\n\n\n\n

Ryan Detrick, chief market strategist at the Carson Group said that positive second-quarter earnings and benign inflation data could encourage more rotation from tech to sectors that have lagged this year and he does not expect that \"bears\" will take control of the market movement. BofA Securities equity and quant strategist Jill Carey Hall noted last week that while BofA's private clients continued buying equities, hedge funds and institutional clients were selling. This behavior might indicate profit-taking rather than an anticipation of a market correction.<\/p>\n\n\n\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

S&P 500 Index Current Situation<\/h2>\n\n\n\n

Specific periods when the bull-bear spread plunged into negative territory, such as December 2018 and March 2020, did a very good job of signaling extreme bearishness that occurred around major market lows. Currently, the S&P 500, at approximately 5,470, is just below its record intraday high of 5,505.53 and traders are closely watching the bull-bear spread in case it continues to worsen.<\/p>\n\n\n\n

Ryan Detrick, chief market strategist at the Carson Group said that positive second-quarter earnings and benign inflation data could encourage more rotation from tech to sectors that have lagged this year and he does not expect that \"bears\" will take control of the market movement. BofA Securities equity and quant strategist Jill Carey Hall noted last week that while BofA's private clients continued buying equities, hedge funds and institutional clients were selling. This behavior might indicate profit-taking rather than an anticipation of a market correction.<\/p>\n\n\n\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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See Related<\/em><\/strong>: 30% Digital Mining Energy Tax; White House Advisors Push For Regulation<\/a><\/p>\n\n\n\n

S&P 500 Index Current Situation<\/h2>\n\n\n\n

Specific periods when the bull-bear spread plunged into negative territory, such as December 2018 and March 2020, did a very good job of signaling extreme bearishness that occurred around major market lows. Currently, the S&P 500, at approximately 5,470, is just below its record intraday high of 5,505.53 and traders are closely watching the bull-bear spread in case it continues to worsen.<\/p>\n\n\n\n

Ryan Detrick, chief market strategist at the Carson Group said that positive second-quarter earnings and benign inflation data could encourage more rotation from tech to sectors that have lagged this year and he does not expect that \"bears\" will take control of the market movement. BofA Securities equity and quant strategist Jill Carey Hall noted last week that while BofA's private clients continued buying equities, hedge funds and institutional clients were selling. This behavior might indicate profit-taking rather than an anticipation of a market correction.<\/p>\n\n\n\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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According to the latest data from Investors Intelligence (II), 61.5% of investment advisors are bullish, marking the highest reading since March 27, 2024, when it reached 62.5%. Investors Intelligence also reported that 18.5% of advisors are bearish, while 20% call for a correction. The bull-bear spread is at 43.0% and it is important to say that the spread's 2024 high was at 48.4% on March 27.<\/p>\n\n\n\n

See Related<\/em><\/strong>: 30% Digital Mining Energy Tax; White House Advisors Push For Regulation<\/a><\/p>\n\n\n\n

S&P 500 Index Current Situation<\/h2>\n\n\n\n

Specific periods when the bull-bear spread plunged into negative territory, such as December 2018 and March 2020, did a very good job of signaling extreme bearishness that occurred around major market lows. Currently, the S&P 500, at approximately 5,470, is just below its record intraday high of 5,505.53 and traders are closely watching the bull-bear spread in case it continues to worsen.<\/p>\n\n\n\n

Ryan Detrick, chief market strategist at the Carson Group said that positive second-quarter earnings and benign inflation data could encourage more rotation from tech to sectors that have lagged this year and he does not expect that \"bears\" will take control of the market movement. BofA Securities equity and quant strategist Jill Carey Hall noted last week that while BofA's private clients continued buying equities, hedge funds and institutional clients were selling. This behavior might indicate profit-taking rather than an anticipation of a market correction.<\/p>\n\n\n\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

The American Association of Individual Investors (AAII) produces a weekly survey of stock market sentiment among its members and according to the latest survey, the outlook remains positive. Investors Intelligence (II), a global investment service, also publishes a weekly sentiment survey which is also closely monitored, and, at extremes, may be useful as a contrarian measure of sentiment.<\/p>\n\n\n\n

According to the latest data from Investors Intelligence (II), 61.5% of investment advisors are bullish, marking the highest reading since March 27, 2024, when it reached 62.5%. Investors Intelligence also reported that 18.5% of advisors are bearish, while 20% call for a correction. The bull-bear spread is at 43.0% and it is important to say that the spread's 2024 high was at 48.4% on March 27.<\/p>\n\n\n\n

See Related<\/em><\/strong>: 30% Digital Mining Energy Tax; White House Advisors Push For Regulation<\/a><\/p>\n\n\n\n

S&P 500 Index Current Situation<\/h2>\n\n\n\n

Specific periods when the bull-bear spread plunged into negative territory, such as December 2018 and March 2020, did a very good job of signaling extreme bearishness that occurred around major market lows. Currently, the S&P 500, at approximately 5,470, is just below its record intraday high of 5,505.53 and traders are closely watching the bull-bear spread in case it continues to worsen.<\/p>\n\n\n\n

Ryan Detrick, chief market strategist at the Carson Group said that positive second-quarter earnings and benign inflation data could encourage more rotation from tech to sectors that have lagged this year and he does not expect that \"bears\" will take control of the market movement. BofA Securities equity and quant strategist Jill Carey Hall noted last week that while BofA's private clients continued buying equities, hedge funds and institutional clients were selling. This behavior might indicate profit-taking rather than an anticipation of a market correction.<\/p>\n\n\n\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Wall Street's major indexes remained relatively flat on Wednesday, experiencing volatile trading as investors reassessed their positions in non-technology sectors ahead of a forthcoming U.S. inflation report. This Friday's personal consumption expenditure report is significant for investors. According to LSEG's interest rate <\/a>probabilities, investors currently see a 62% chance of a 25-basis point rate cut in September, and about two cuts by the year-end.<\/p>\n\n\n\n

The American Association of Individual Investors (AAII) produces a weekly survey of stock market sentiment among its members and according to the latest survey, the outlook remains positive. Investors Intelligence (II), a global investment service, also publishes a weekly sentiment survey which is also closely monitored, and, at extremes, may be useful as a contrarian measure of sentiment.<\/p>\n\n\n\n

According to the latest data from Investors Intelligence (II), 61.5% of investment advisors are bullish, marking the highest reading since March 27, 2024, when it reached 62.5%. Investors Intelligence also reported that 18.5% of advisors are bearish, while 20% call for a correction. The bull-bear spread is at 43.0% and it is important to say that the spread's 2024 high was at 48.4% on March 27.<\/p>\n\n\n\n

See Related<\/em><\/strong>: 30% Digital Mining Energy Tax; White House Advisors Push For Regulation<\/a><\/p>\n\n\n\n

S&P 500 Index Current Situation<\/h2>\n\n\n\n

Specific periods when the bull-bear spread plunged into negative territory, such as December 2018 and March 2020, did a very good job of signaling extreme bearishness that occurred around major market lows. Currently, the S&P 500, at approximately 5,470, is just below its record intraday high of 5,505.53 and traders are closely watching the bull-bear spread in case it continues to worsen.<\/p>\n\n\n\n

Ryan Detrick, chief market strategist at the Carson Group said that positive second-quarter earnings and benign inflation data could encourage more rotation from tech to sectors that have lagged this year and he does not expect that \"bears\" will take control of the market movement. BofA Securities equity and quant strategist Jill Carey Hall noted last week that while BofA's private clients continued buying equities, hedge funds and institutional clients were selling. This behavior might indicate profit-taking rather than an anticipation of a market correction.<\/p>\n\n\n\n

Regarding the 11 GICS sectors, Hall reports that clients mainly purchased stocks in seven of the major groups, with the largest inflows going into tech and communication services for the third consecutive week. Notably, communication services have experienced the longest buying streak at 12 weeks. Conversely, financials saw the largest outflows for the second consecutive week.<\/p>\n","post_title":"Most Investment Advisors Are Bullish On The US Stock Market. What To Expect In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"most-investment-advisors-are-bullish-on-the-us-stock-market-what-to-expect-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2024-06-29 18:31:24","post_modified_gmt":"2024-06-29 08:31:24","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17584","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17353,"post_author":"14","post_date":"2024-06-21 19:51:27","post_date_gmt":"2024-06-21 09:51:27","post_content":"\n

Wall Street's main indexes opened mixed on Tuesday as investors wait for an important inflation report that could influence the Federal Reserve's decision on interest rate cuts. The consumer price index (CPI) is set to be released before the market opens on Wednesday, and investors will be closely monitoring these figures, along with the Federal Reserve's policy statement scheduled for Wednesday afternoon.<\/p>\n\n\n\n

The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services and it is a key indicator of inflation, which affects the purchasing power of money. According to economists surveyed by Reuters, the headline consumer price index (CPI) is projected to rise by 0.1% in May, down from the 0.3% increase observed in the previous month. It will be the second gauge of U.S. inflation in June, following Friday's hotter-than-expected wage growth numbers.<\/p>\n\n\n\n

Although the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting, investors will be keenly watching the statement and comments from Chair Jerome Powell for any hints about future plans.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Investors Wait For A Crucial Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve<\/a><\/p>\n\n\n\n

Federal Reserve Rate Cut And Election<\/h2>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), predicts that there will be one Federal Reserve rate cut after the election, likely in December. However, he also suggests that a spike in unemployment this summer could make a September cut possible. Sam Stovall, chief investment strategist of CFRA Research in New York, added<\/a>:<\/p>\n\n\n\n

\"Investors are playing it safe but we will continue to see all-time highs, and you don\u2019t want to make emotional decisions. The S&P could set up another all-time high, CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end.\"<\/em><\/p>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings.<\/p>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. Investors are currently navigating a complex narrative: on the one hand, the U.S. economy remains resilient, but on the other hand, inflation and rising interest rates pose potential challenges for the stock market.<\/p>\n","post_title":"Investors Wait For An Important Inflation Report That Could Influence On Decision For Interest Rate Cuts From The Federal Reserve. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investors-wait-for-an-important-inflation-report-that-could-influence-on-decision-for-interest-rate-cuts-from-the-federal-reserve-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-21 19:51:32","post_modified_gmt":"2024-06-21 09:51:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17353","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17450,"post_author":"14","post_date":"2024-06-20 22:33:19","post_date_gmt":"2024-06-20 12:33:19","post_content":"\n

The S&P 500 and the Nasdaq Composite closed at new record highs on Tuesday as investors digested the latest economic data and mixed comments from Federal Reserve officials. The S&P 500 index rose 0.3% to 5,487; the technology-heavy Nasdaq ticked higher to 17,862, while the Dow Jones Industrial Average advanced 0.2% and closed at 38,834 points.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq closed at record highs this Tuesday<\/em><\/figcaption><\/figure>\n\n\n\n

Financials and technology companies were the top-performing sectors, while communication services experienced the largest decline. US stock markets are closed this Wednesday for Juneteenth but according to Sam Stovall, chief investment strategist of CFRA Research in New York, even though investors are playing it safe, we will continue to see all-time highs in the upcoming days.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The S&amp;P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?<\/a><\/p>\n\n\n\n

Earnings Growth And US Stocks <\/h2>\n\n\n\n

Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions. The US economy remains resilient and regarding the latest economic news, retail sales in the US edged up 0.1% last month following April's downwardly revised 0.2% decline.<\/p>\n\n\n\n

Another positive information is that US industrial production rose more than expected in May as manufacturing output returned to growth after two months of declines. However, Boston Fed President Susan Collins said this week that even though recent inflation data has been \"encouraging,\" the process of lowering inflation may take longer than expected. Boston Fed President Susan Collins said :<\/p>\n\n\n\n

\"The data suggest an economy with demand and supply coming into better balance, as required to restore price stability. However, this process may just take more time than previously thought. It is too soon to determine whether inflation is durably on a path back to the 2% target.\"<\/em><\/p>\n\n\n\n

Joseph Kalish, chief global macro strategist at Ned Davis Research (NDR), forecasts that there will be only one Federal Reserve rate cut this year, which certainly poses a risk for the US economy. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Closed At Record Highs This Tuesday.\u00a0 What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-closed-at-record-highs-this-tuesday-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-20 22:35:56","post_modified_gmt":"2024-06-20 12:35:56","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17450","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17323,"post_author":"18","post_date":"2024-06-19 23:12:43","post_date_gmt":"2024-06-19 13:12:43","post_content":"\n

In a move that risks undermining the dollar's global dominance, the United States is chipping away at the pillars that have long supported the currency's reserve status, according to a Reuters report. The latest blows come from powerful Americans questioning the rule of law following the conviction of former President Donald Trump.<\/p>\n\n\n\n

The attacks on the legal system in the aftermath of Trump's conviction, combined with the country's increasing use of sanctions as a punitive foreign policy tool and its mounting debt burden, have effectively dared the rest of the world to find an alternative to the dollar. However, despite growing consternation at home and abroad over the consequences of U.S. hubris, no credible alternative has emerged, and the world seems to have partly itself to blame.<\/p>\n\n\n\n

In Asia, for instance, people are urgently seeking ways to reduce their U.S. exposure and boost non-dollar trade flows but attempts to build such systems have been slow-going or haven't gained traction. Rising authoritarianism, threats to individual and property rights, and geopolitical tensions have made other options less attractive than U.S. assets, even if their appeal has diminished.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Survey Shows Rising Interest In Crypto Ahead Of 2024 Election, Says Grayscale<\/a><\/p>\n\n\n\n

Central Bank Reserve Managers' Plan<\/h2>\n\n\n\n

A recent survey<\/a> shows that central bank reserve managers plan to increase their dollar holdings over the next 12-24 months due to the rise in global geopolitical tensions and the need for liquidity, drawing them to the currency's safe-haven status.<\/p>\n\n\n\n

At its core, the dollar's dominant role in the world draws from the United States' democratic principles, supported by the massive size of its economy, the depth of its markets, the strength of its institutions, and the rule of law. However, the increasing messiness of the U.S. political landscape is testing some of the underpinnings of the dollar's global appeal.<\/p>\n\n\n\n

Attacks on the U.S. legal system have increased after Trump's conviction, with Florida Governor Ron DeSantis calling it a \"kangaroo court.\" A major investor based in Asia expressed concerns about potential threats to U.S. institutions, noting that any debasing of the Federal Reserve's authority could affect the dollar's credibility and lead to a double-digit depreciation of the currency.<\/p>\n\n\n\n

As the world watches the legal uncertainties unfold in the United States, the implications for the dollar's global dominance remain uncertain. While no credible alternative has emerged yet, the growing doubts over the strength of U.S. institutions and the rule of law could erode the currency's appeal in the long run.<\/p>\n\n\n\n

The U.S. faces a delicate balancing act between maintaining its economic and financial might while upholding the democratic principles and legal integrity that have underpinned the dollar's reserve status. As the world's financial center grapples with these challenges, the search for alternative currencies or systems may intensify, potentially reshaping the global financial landscape in unexpected ways.<\/p>\n","post_title":"United States Legal Turmoil Raises Concerns Over Dollar's Global Supremacy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-legal-turmoil-raises-concerns-over-dollars-global-supremacy","to_ping":"","pinged":"","post_modified":"2024-06-19 23:12:47","post_modified_gmt":"2024-06-19 13:12:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17323","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17270,"post_author":"14","post_date":"2024-06-10 19:27:55","post_date_gmt":"2024-06-10 09:27:55","post_content":"\n

The S&P 500 and Nasdaq indexes reached record highs this Wednesday supported mainly by technology stocks as markets digested economic data that could support a much-expected start to the Federal Reserve's policy easing cycle.<\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq reached record highs this Wednesday<\/em><\/figcaption><\/figure>\n\n\n\n

The May private payrolls report released this Wednesday is the latest indication of a loosening labor market, potentially prompting the Fed to consider rate cuts this year. Additionally, a report on Tuesday revealed that job openings in April fell to their lowest level in over three years. Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston said<\/a>:<\/p>\n\n\n\n

\"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market.\"<\/em><\/p>\n\n\n\n

According to the CME's FedWatch tool, market participants now estimate a nearly 69% probability of a rate cut in September, up from around 50% just last week. However, it is important to say that investors are now looking forward to the nonfarm payrolls report, scheduled for release on Friday, to gain a comprehensive understanding of the labor market and the interest rate path.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Have Goldman Sachs Analysts Become Overly Optimistic By Revising Their Year-End S&P 500 Index Target Upwards<\/a><\/p>\n\n\n\n

Monthly Non-Farm Payroll Data<\/h2>\n\n\n\n

The monthly non-farm payroll data in the U.S. is a critical economic indicator that provides insights into the employment situation but also reflects economic growth, consumer spending potential, and business confidence, making it a closely watched report by investors, policymakers, and economists.<\/p>\n\n\n\n

The upcoming monthly non-farm payrolls data is expected to reveal a slowdown in job additions for May and according to economic analysts, many companies could face liquidity problems in the upcoming months. The current high interest rates encourage saving over spending and increase the cost of debt which could be particularly challenging for companies with substantial credit or variable interest rate loans.<\/p>\n\n\n\n

Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity. This situation could adversely affect stock prices and make fixed-income investments, such as bonds, more appealing than stocks.<\/p>\n","post_title":"The S&P 500 And Nasdaq Indexes Reached Record Highs This Wednesday. Could A Pullback Be Imminent?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-sp-500-and-nasdaq-indexes-reached-record-highs-this-wednesday-could-a-pullback-be-imminent","to_ping":"","pinged":"","post_modified":"2024-06-10 19:27:59","post_modified_gmt":"2024-06-10 09:27:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17270","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17144,"post_author":"14","post_date":"2024-06-02 22:13:10","post_date_gmt":"2024-06-02 12:13:10","post_content":"\n

The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever as AI leader Nvidia hit a record high which lifted investor sentiment and contributed to the rally. This milestone underscored the ongoing strength in the technology sector and the impact of major players like Nvidia on market movements. Michael James, managing director of equity trading at Wedbush Securities in Los Angeles said<\/a>:<\/p>\n\n\n\n

\"In terms of today\u2019s price action, it\u2019s all about technology and the winners continue to be the winners, specifically Nvidia. Today's tape is a function of positive stories having some stock-specific impact, but overall, as you can see from the Dow being down around 200 points, it\u2019s a generally sloppy overall market session.\"<\/em><\/p>\n\n\n\n

\"\"
The tech-heavy index Nasdaq exceeded 17,000 points for the first time ever<\/em><\/figcaption><\/figure>\n\n\n\n

Nvidia Fiscal First-Quarter Report <\/h2>\n\n\n\n

Nvidia reported fiscal first-quarter results that exceeded Wall Street's estimates, driven by soaring demand for generative artificial intelligence. This surge led to record data center revenue, highlighting the company's pivotal role in the AI market and its strong financial performance. It is also important to mention that Nvidia's continued innovation and release of advanced GPU products attracted more customers and their cutting-edge technology offered superior performance, making them the preferred choice for various industries.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Market attention now turns to the U.S. core Personal Consumption Expenditures Price Index report for April, set to be released later in the week. The Fed's preferred inflation measure is anticipated to remain stable on a monthly basis but investors will be looking to see if those results will reinforce the changing opinion from the Fed policymakers that there will be no rate cuts in 2024.<\/p>\n\n\n\n

Minneapolis Fed President Neel Kashkari stated in an interview with CNBC that the U.S. central bank should hold off on cutting interest rates this year. He also mentioned that the bank might consider raising rates if inflation does not continue to decrease. This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices.<\/p>\n","post_title":"Nasdaq Exceeded 17,000 Driven By A Boost From Nvidia. What To Expect In The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"nasdaq-exceeded-17000-driven-by-a-boost-from-nvidia-what-to-expect-in-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-06-02 22:13:14","post_modified_gmt":"2024-06-02 12:13:14","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17144","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":17013,"post_author":"18","post_date":"2024-05-27 09:00:41","post_date_gmt":"2024-05-26 23:00:41","post_content":"\n

Federal Reserve policymakers are advocating a patient approach, emphasizing the need to see several more months of encouraging inflation data before considering interest rate cuts, according to remarks made on Tuesday. This stance reinforces the central bank's commitment to ensuring that inflation is firmly on track toward the 2% target before easing its monetary policy stance.<\/p>\n\n\n\n

As reported by Reuters, Fed Governor Christopher Waller stated that in the absence of a significant weakening in the labor market, he needs to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. His comments were delivered during an event at the Peterson Institute for International Economics in Washington.<\/p>\n\n\n\n

While acknowledging the reassuring nature of the latest inflation readings, Waller dismissed speculation about the need for further rate hikes, deeming the probability very low. He underscored the importance of avoiding abrupt policy shifts, stating that the Fed does not want to go off a cliff, emphasizing that as the critical thing.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration<\/a><\/p>\n\n\n\n

Benchmark Interest Rate<\/h2>\n\n\n\n

The Fed has maintained its benchmark interest rate within the 5.25%-5.50% range since July of the previous year. Despite three consecutive months of higher-than-anticipated inflation figures from January to March, the central bank is cautiously optimistic about recent signs of a cooling labor market and progress toward lowering inflation to the desired level.<\/p>\n\n\n\n

This cautious approach aligns with the views of market analysts. Krishna Guha, Vice Chairman at Evercore ISI, interpreted Waller's remarks as indicating a willingness to consider rate cuts in September, contingent upon a more definitive downward trend in inflation over the coming months.<\/p>\n\n\n\n

The Federal Reserve's<\/a> patient stance reflects a data-driven approach to monetary policy decisions. By emphasizing the need for sustained progress on inflation before implementing rate cuts, the central bank aims to strike a balance between supporting economic growth and maintaining price stability.<\/p>\n\n\n\n

As the Fed continues to monitor economic indicators closely, the timing of the initial rate cut will hinge on the trajectory of inflation and labor market dynamics in the months ahead. This prudent strategy underscores the central bank's commitment to achieving its inflation target while avoiding potential disruptions to the economy.<\/p>\n","post_title":"Federal Reserves Seeks More Inflation Cooling Before Easing Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"federal-reserves-seeks-more-inflation-cooling-before-easing-rates","to_ping":"","pinged":"","post_modified":"2024-05-27 09:00:45","post_modified_gmt":"2024-05-26 23:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=17013","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16908,"post_author":"14","post_date":"2024-05-19 23:56:24","post_date_gmt":"2024-05-19 13:56:24","post_content":"\n

Federal Reserve Chair Jerome Powell said this Tuesday that the US Central Bank is expected to maintain its benchmark lending rate at an elevated level for an extended duration. From March 2022 to July 2023, the Federal Reserve raised interest rates by 525 basis points to curb inflation and since then, it has held rates steady, with its most recent decision to pause occurring earlier this month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

One of the reasons behind Federal Reserve Chair Jerome Powell's statement is the fact that the latest data that was published this week showed that the US producer price index rose 0.5% in April following a downwardly revised 0.1% decline in March, beating the 0.3% gain expected in a survey compiled by Bloomberg. PPI was up 2.2% year-over-year in April, while core PPI rose by 2.4% year-over-year, both surpassing their March rates of 1.8% and 2.1%<\/p>\n\n\n\n

Federal Reserve Chair Jerome Powell also added that policymakers aren't anticipating further interest rate hikes beyond current levels, yet he cautioned that achieving the 2% target will be a challenging journey with bumps along the way. Tom Porcelli, chief economist at PGIM Fixed Income, suggests that if the Federal Reserve refrains from reducing interest rates this year, it is probable that they will implement five to six rate cuts in 2025.<\/p>\n\n\n\n

See Related: <\/em><\/strong>The first-quarter U.S. Earnings Season Showed Further Improvements. What To Expect From The Upcoming Days?<\/a><\/p>\n\n\n\n

Federal Reserve Interest Rates<\/h2>\n\n\n\n

Even amidst reports of persistent inflation and fears of prolonged higher interest rates by the Federal Reserve, stocks have remained relatively stable in recent weeks. Wall Street strategists credit this resilience to an unexpectedly robust set of first-quarter earnings. Robust earnings growth has fueled the US stocks and positive Q1 earnings results provide further support to the ongoing bullish view, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

However, some analysts believe the U.S. economy is starting to see signs of a slowdown and according to them, many companies could face liquidity problems in the upcoming months. High rates encourage saving over spending and make the debt more costly, and companies that have a bigger credit or other loans with variable interest rates could be in a difficult situation. Higher borrowing costs can hurt corporate profits and discourage businesses from borrowing to invest in new projects, which can hurt economic activity and job creation.<\/p>\n\n\n\n

This situation could negatively affect stock prices, and it is also important to mention that high interest rates make fixed-income investments, such as bonds, more attractive compared to stocks. As a result, investors may shift their money away from stocks, leading to a decrease in stock prices. Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"The Federal Reserve Is Expected To Maintain Its Benchmark Lending Rate At An Elevated Level For An Extended Duration","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-federal-reserve-is-expected-to-maintain-its-benchmark-lending-rate-at-an-elevated-level-for-an-extended-duration","to_ping":"","pinged":"","post_modified":"2024-05-19 23:56:29","post_modified_gmt":"2024-05-19 13:56:29","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16908","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16825,"post_author":"14","post_date":"2024-05-13 17:33:44","post_date_gmt":"2024-05-13 07:33:44","post_content":"\n

Despite reports of persistent inflation and concerns that the Federal Reserve <\/a>may maintain higher interest rates for longer than anticipated, stocks have largely held steady in recent weeks. Wall Street strategists attribute this resilience to a stronger-than-expected set of first-quarter earnings.<\/p>\n\n\n\n

As the first-quarter U.S. earnings season nears its end, projected earnings growth for S&P 500 companies continues to rise. Overall S&P 500 earnings growth is now seen at 7.8% year-over-year, based on results from 424 of the S&P 500 companies as of Tuesday and estimates for the rest, according to LSEG.<\/p>\n\n\n\n

More than 78% of companies beat Wall Street earnings expectations and among the biggest improvements in earnings growth for the quarter is the communication services group, whose first-quarter earnings have increased almost 45% year-over-year.<\/p>\n\n\n\n

It is also important to mention that net profit margins are pacing for 11.7% growth in the first quarter, above the five-year average of 11.5% growth and higher than the same period a year ago. Jean Boivin, the head of the BlackRock Investment Institute, said:<\/p>\n\n\n\n

\"Higher interest rates usually hurt U.S. stock valuations. Instead, strong Q1 earnings have supported stocks even as high rates and lofty expectations raise the bar for what can keep markets sanguine.\"<\/em><\/p>\n\n\n\n

\"S&P<\/figure>\n\n\n\n

See Related:<\/em><\/strong> Citigroup's First-Quarter Earnings Drop 27% On Reorganization Costs<\/a><\/p>\n\n\n\n

Optimistic strategists on Wall Street contend that robust earnings growth has fueled the S&P 500\u00a0 index's approximately 9% rally this year and may propel stocks even further. Citi Bank's equity strategy team led by Scott Chronert wrote in research this week that positive Q1 earnings results provide further support to the ongoing bullish view toward S&P 500 fundamentals, even as we navigate the Fed and underlying economic conditions.<\/p>\n\n\n\n

Results are still expected from several high-profile U.S. retailers, including Walmart WMT.N, which is due to report next week but despite earnings results investors will continue to focus on remarks from several Federal Reserve officials, looking for signs of lower future interest rates. Since Fed Chair Jerome Powell hinted against rate increases and nonfarm payroll data came in softer last week, investors are gaining confidence the central bank could begin its easing cycle soon.<\/p>\n","post_title":"The first-quarter U.S. Earnings Season Showed Further improvements. What To Expect From The Upcoming Days?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-first-quarter-u-s-earnings-season-showed-further-improvements-what-to-expect-from-the-upcoming-days","to_ping":"","pinged":"","post_modified":"2024-05-13 17:33:48","post_modified_gmt":"2024-05-13 07:33:48","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16825","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":16728,"post_author":"14","post_date":"2024-05-04 00:19:53","post_date_gmt":"2024-05-03 14:19:53","post_content":"\n

Wall Street's main indexes rose on Thursday, a day after the Federal Reserve left interest rates unchanged and hinted at a more dovish stance. The attention of investors now turns to an important job report that will be released on Friday and after this report, we could have a clearer outlook on the labor market and the interest rate path.<\/p>\n\n\n\n

According to the CME FedWatch tool, money markets currently estimate a 59% probability of a rate cut of at least 25 basis points happening in September, with a 70.8% likelihood of a rate cut in November.<\/p>\n\n\n\n

The main reason why we will not see lower interest rates earlier is the fact that Federal Reserve Chair Jerome Powell said that recent inflation data had not given policymakers enough confidence to ease monetary policy soon, noting that the U.S. central bank may need to keep interest rates higher for longer than previously thought. Naomi Fink, global strategist at Nikko Asset Management, said<\/a>:<\/p>\n\n\n\n

\"Inflation remains higher than desired in the United States, the Fed remains in wait-and-see mode and not ruling out (rate) cuts altogether. Meanwhile, the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, pointing to a still fairly tight labor market.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>European Central Bank Hints At A Possible Crypto Mining Ban<\/a><\/p>\n\n\n\n

April Employment Report<\/h2>\n\n\n\n

Despite muted jobless claims it is also important to mention that data released on this Thursday showed a drop in planned layoffs, a surge in quarterly labor costs, and a sharp deceleration in productivity, all of which throws focus on Friday's much anticipated April employment report.<\/p>\n\n\n\n

Positive information is that the Organization for Economic Cooperation and Development (OECD) raised its global growth forecast, partially due to the resilience of the U.S. economy. First-quarter earnings season is almost complete, with 373 S&P 500 companies having reported their results and according to LSEG data, 77% of those companies have exceeded expectations.<\/p>\n\n\n\n

Investors are currently trying to balance this two-sided narrative: the U.S. economic situation, which still remains resilient, and at the same time the inflation picture, and interest rates, which will eventually be problematic for the stock market.<\/p>\n","post_title":"Wall Street Stocks Advanced On The Fed's Dovish Signals. Focus Now Moves To The Job Report","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-stocks-advanced-on-the-feds-dovish-signals-focus-now-moves-to-the-job-report","to_ping":"","pinged":"","post_modified":"2024-05-04 00:19:59","post_modified_gmt":"2024-05-03 14:19:59","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=16728","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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