The Fed is having a good morning. Inflation is decelerating and their goal to deliver a soft landing seems reachable.
10-08-2022 11:12 GMT
by Edward Moya
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We're seeing plenty of apprehension ahead of the US inflation report on Wednesday, with Asia in the red and Europe following suit.
It's impossible to get away from the fact that the inflation report has held the markets back this week. There's clearly a desperate desire to be more optimistic about the outlook; that's evident from the scale of the recovery already seen in equity markets despite there being seemingly little to celebrate.
But the jobs report on Friday following on from the Fed comm
10-08-2022 04:51 GMT
by Craig Erlam
US stocks edged lower after a round of economic data reminded Wall Street that stagflation is here. Stocks won’t be able to do much as summer trading volumes are here and ahead of a pivotal inflation report. Tech stocks continue to weaken after another semiconductor maker delivered a revenue warning.
09-08-2022 15:04 GMT
by Edward Moya
Equity markets are lacking any real direction in Asia and that appears to be carrying into the European session as well.
Europe is seeing minor losses on the open, offsetting some of the small gains in choppy trade at the start of the week. This follows a similarly choppy session in the US on Monday as the Dow flirted with exiting correction territory and the Nasdaq bear market territory.
We may have reached a point in which investors need to decide whether they truly buy into the recovery/no re
09-08-2022 04:50 GMT
by Craig Erlam
With persistent inflation and a strong labor market, the Fed is on a clear path to raise rates. This week is all about inflation and many traders are expecting to see the inflation to decelerate.
08-08-2022 16:23 GMT
by Edward Moya
A relatively slow start to the week as investors continue to digest Friday's jobs report and what it means for financial markets just as some optimism was returning.
The report itself was strong almost across the board, with participation being the only outlier, but Fed officials will not have been quite so enthused which makes it a tough one for investors to get too excited about.
On the one hand, it strengthens the argument that the economy is not really experiencing a recession as the labour
08-08-2022 04:36 GMT
by Craig Erlam
The July nonfarm payroll report delivered a juicy plot twist in the Wall Street’s Fed pivot playbook. Stubbornly high inflation and a global economic slowdown was expected to drag down the US economy, but after today’s jobs report that does not seem to be the case. Fed officials were already pushing back on the idea of a Fed pivot and now it seems they will be debating whether they need to be even more aggressive to tackle inflation given how strong the labor market is performing.
US stocks pl
05-08-2022 12:50 GMT
by Edward Moya
There's no such thing as a quiet week in the markets these days and this week has undoubtedly been no different.
The jobs report was always expected to be the highlight but the Bank of England gave it a good run for its money on Thursday, hiking by the most in 27 years while putting out some pretty dire economic forecasts. It would appear we have very little to look forward to for the next couple of years here in the UK.
While I believe other central banks are slowly gravitating toward the econo
05-08-2022 07:01 GMT
by Craig Erlam
Stocks continue to ignore the deepest yield curve inversion since the early 2000s. The S&P 500 index has rebounded over 13% from the June lows as many on Wall Street anticipate that the Fed will stop quantitative tightening next year and begin cutting interest rates. If the next couple of inflation and nonfarm payroll reports support the Fed pivot argument, we might stop hearing these bear market calls.
Equities might struggle to keep the rally going as investors continue to see economic
04-08-2022 11:06 GMT
by Edward Moya
We're seeing a little more positivity in the markets after another lively week and there's still plenty to come as we get closer to the weekend.
Fed officials have been out in force again; this time with a focus on market expectations of a swift reversal from rate hikes to cuts early next year. Both Mary Daly and Neel Kashkari were very clear that it's unreasonable to expect such a policy u-turn given the inflation environment, with Kashkari even saying he's not sure what markets are looking at
04-08-2022 05:39 GMT
by Craig Erlam
US stocks rallied after a steady dose of impressive earnings and economic data. The economy doesn't look bad at all after strong earnings from Moderna, Gilead Science, CVS, Electronic Arts, Starbucks, and SoFi. The economic data broadly came in higher than expected as the service part of the economy seems to be stabilizing and price pressures are improving.
03-08-2022 14:02 GMT
by Edward Moya
Stock markets are a little higher after turning lower on Tuesday amid nerves over Nancy Pelosi's Taiwan visit.
This week was already shaping up to be another rollercoaster ride and Pelosi's trip just added another layer of event risk for the markets. There will be hope following the initial response from Beijing that any escalation won't be too severe, although relations between the world's largest economies are clearly hugely strained and deteriorating.
Compounding the moves in the markets yest
03-08-2022 09:44 GMT
by Craig Erlam
US stocks went on a rollercoaster ride as traders grew nervous over China’s retaliation over House Speaker Pelosi’s trip to Taiwan, a reminder from Fed’s Daly that their interest rate hiking cycle is nowhere near done, and further signs the labor market is cooling but still remains tight enough for the Fed to deliver a couple more rate hikes. China’s response to Pelosi’s trip to Taiwan could have an impact on supply chains and demand, which could keep the inflationary pressures going strong.
02-08-2022 17:14 GMT
by Edward Moya
We're seeing more risk aversion on Tuesday as Nancy Pelosi's trip to Taiwan generates numerous unsettling headlines at a time of strained ties between the US and China.
US House Speaker Pelosi's proposed visit has been met with numerous threats from Beijing including an unspecified military response. They have continued this morning, hours ahead of the apparent arrival which is clearly making investors very nervous.
Stock markets throughout most of Asia are in the red, with those in China, Hong
02-08-2022 04:50 GMT
by Craig Erlam
A mixed start to the week in Asia where Chinese PMIs dampened the mood as the reopening boost to activity quickly faded.
The country was already facing an uphill challenge, to put it mildly, with regards to its growth target this year and the fact that manufacturing activity is slowing again doesn't bode well. While the non-manufacturing survey is much healthier, it also experienced a deceleration last month which further suggests the economy is struggling to get back to full strength.
One posit
01-08-2022 04:00 GMT
by Craig Erlam
Stocks rallied after robust mega-cap tech earnings, hopium that the Fed will pivot soon, and economic data that suggests the consumer is doing just fine.
Apple
Investors embraced Apple’s slight earnings beat with both the top and bottom line. The standout miss was Mac revenue which was the first decline of the pandemic, which was due to supply constraints and FX headwinds. The iPhone and services numbers were solid and will lead many to believe the consumer is still fine. The numbers out
29-07-2022 14:54 GMT
by Edward Moya
Equity markets are ending another winning week in positive territory following a bumper few days of earnings, data and of course, the Fed.
This week has delivered another 75 basis point rate hike, earnings and revenue misses for some of the biggest tech names and an unexpected recession that isn't a real recession in the world's largest economy. And yet, the way equity markets have responded, the week couldn't have gone much better.
29-07-2022 08:12 GMT
by Craig Erlam
US GDP declines in Q2
The US economy is weakening much faster than anyone expected. The first look at the second quarter showed another negative reading, which was a surprise for most on Wall Street.
28-07-2022 15:13 GMT
by Edward Moya
It's been quite the 24 hours in financial markets, one I feel many will be trying to work out for many weeks to come.
The Fed on Wednesday raised rates by 75 basis points, as expected, before leaving as many doors open as possible for September. Chair Powell and his colleagues went for a cocktail of hawkish data dependency with a dovish twist.
28-07-2022 11:33 GMT
by Craig Erlam
You had the feeling that Wall Street, with perpetually itchy buy-button trigger fingers, was primed for this FOMC. As expected, the FOMC raised the Fed Funds target by 0.75%, to a target range of 2.25%-2.50%.
28-07-2022 04:24 GMT
by Jeffrey Halley