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Wall Street cautious: will Fed raise rates this year?
Hello, I’m Angeline Ong, and welcome to beat the street, the show that gives you all the tradeable news and data you need ahead of the Wall Street Open.
Coming up, Wall Street is cautious after Federal Reserve (Fed) chair Jerome Powell left the door open to another rate hike. Investors are currently regrouping after those comments and a noticeably weak auction of benchmark 30-year bonds.
Also, US TTI being eyed, this is a key event next week, key economic event. Investors looking to risk for more cues on the future path of US interest rates. If we get a hot number, this could be a shot across the bow for the Fed.
And a retail roundup ahead of Black Friday and Cyber Monday and a look at which retail stocks will do better than others.
Volatility stable after Powell’s comments
Good afternoon to you. This is the new edition of beat the street with me, Angeline Ong. Not long now before Wall Street starts trading, let’s take a look at volatility first after Powell’s comments. And it still seems quite stable there at around 16 at 37.
Also Powell’s comments coming at a time when many investors out there were not discounting the fact that he could leave interest rates, that potential hike, leave that door open because inflation still remains sticky and still very, very high, relatively, that is to speak.
US economy may be reaccelerating
However, it must be said that the US economy still remains resilient. Here’s a look at the S&P 500, the Dow Industrial’s first trading around 33.983 there. Coming off just a touch, but not much, really. Taking a look at the S&P 500 now, which is called the US 500 on the IG platform, a similar story there.
As I mentioned earlier, the US economy has been very resilient given the headwinds of inflation and, also, that cost of living crisis, growth, payrolls, inflation are all pointing to the same direction: to an economy that seems to be reaccelerating as opposed to going the other way.
Traders now pricing in around a 60% chance of a rate cut by the Fed at the June meeting compared with expectations of a cut in May before Powell spoke. This is according to the CMU’s FedWatch tool.
Now we could get more cues later this session as to where the thinking for the Fed might be heading because we have the University of Michigan’s Consumer Sentiment Index. likely to show a preliminary reading of 63.7 in November compared to a reading of 63.8 in October.
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