Last Updated 4:05 PM EST
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Stock indices finished today’s trading session in the green. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 1.76%, 0.94%, and 0.56%, respectively. The energy sector (XLE) was the session’s laggard, as it fell 0.95%. Conversely, the technology sector (XLK) was the session’s leader, with a gain of 2.18%.
Furthermore, the U.S. 10-Year Treasury yield saw little change, as it hovers around 3.74%. Conversely, the Two-Year Treasury yield decreased to 4.58%. This brings the spread between them to -84 basis points.
Compared to yesterday, the market is pricing in a higher chance of a higher Fed Funds rate for December 2023. In fact, the market’s expectations for a rate in the range of 4.75% to 5% decreased to 24.7% compared to Friday’s expectations of 25.7%.
In addition, the market is now also assigning a 40% probability to a range of 5% to 5.25%. For reference, investors had assigned a 37.8% chance Friday.
Last updated: 2:31 PM EST
Today’s stock rally continues to gain steam at the time of writing as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 1.2%, 0.5%, and 0.2%, respectively
However, Americans are increasingly leaning on credit cards to keep pace with their expenditures, amassing a record debt of $988 billion, according to the Federal Reserve Bank of New York. This averages out to about $5,700 per person, a daunting 17% increase from last year and ominously close to the $1 trillion mark.
The factors propelling this upswing include high inflation forcing many to rely on credit for basic needs, as well as the difficulty for some in downscaling their lifestyle amidst growing costs. Further aggravating the issue are the highest interest rates since the Fed began tracking them in 1994, with the average annual percentage rate now surpassing 20%.
Last updated: 11:40 AM EST
Stocks are in the green at the time of writing as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.8%, 0.3%, and 0.1%, respectively
The Federal Reserve is predicted to hold its policy rate steady on Wednesday, following a sequence of 10 consecutive rate hikes. This move would allow Fed officials to gauge the effect of the 5% tightening they’ve already implemented and observe the impact of this spring’s bank stresses. The market is currently assigning a 74% chance of maintaining the federal funds target rate range at 5%-5.25%, according to the CME FedWatch Tool.
This is despite potential influences like inflation, strong nonfarm payrolls, rate hikes by Australian and Canadian banks, and hawkish comments from a few Fed officials. Indeed, leading economists like James Knightley from ING and David Mericle from Goldman Sachs believe the Fed will likely keep steady at the current rate.
However, it’s important to note that not hiking the rate doesn’t mean a rate cut is imminent, and future increases could happen if data suggests so. Indeed, investors anticipate a 25 basis point rate hike in late July, with a 56% probability assigned by the CME FedWatch tool.
Last updated: 9:30 AM EST
Stocks opened higher at the start of the week, with Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) up by 0.43%, 0.3%, and 0.27%, respectively, at 9:30 a.m., EST, June 12.
First published: 6:45AM EST
U.S. Futures are trending higher on Monday morning, as if building momentum ahead of the consumer price index (CPI) data due June 13 and the Federal Open Market Committee (FOMC) meeting commencing tomorrow. The three major averages closed Friday on a positive note, with the S&P 500 and the Nasdaq Composite adding to several consecutive weeks of gains. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up 0.46%, 0.36%, and 0.27%, respectively, at 4:15 a.m., EST, June 12.
April’s CPI data came in at its lowest level in two years, with a 4.9% year-over-year increase. Experts predict May’s headline inflation to decrease to 4.2% year-over-year, while core inflation is expected to rise marginally to 5.6% from April’s 5.5%. If May’s inflation print comes in as expected or below expectations, it could trigger the Fed to put a pause on interest rate hikes. Other economic data points scheduled this week include the Producer Price Index (PPI) on June 14, May’s Retail Sales data on June 15, and June’s preliminary reading of the Consumer Sentiment Index.
On the earnings front, Oracle Corporation (NYSE:ORCL) will report fourth-quarter financial results after the market closes today, with analysts expecting the firm to exceed expectations.
Elsewhere, European indices are trading in positive territory today as traders look forward to an interest rate decision from the European Central Bank (ECB) on June 15. Furthermore, Swiss banker UBS Group (NYSE:UBS) said that it has completed the acquisition of beleaguered lender Credit Suisse, sending the shares higher by 1.5% in pre-market trading in the U.S. this morning.
Asia-Pacific Markets End Mixed on Monday
Asia-Pacific indices ended the trading day mixed today as investors await key monetary policy decisions from central banks around the globe. The Bank of Japan will conclude its policy meeting on June 16.
Hong Kong’s Hang Seng index and China’s Shenzhen Component indices ended the day up by 0.07% and 0.74%, respectively, while the Shanghai Composite index ended the day down by 0.08%.
At the same time, Japan’s Nikkei and Topix indices ended higher by 0.52% and 0.65%, respectively.
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