Last Updated 4:04 PM EST
Furthermore, the U.S. 10-Year Treasury yield increased to 3.75%. The Two-Year Treasury yield also increased, as it hovers around 4.61%. This brings the spread between them to -86 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 25.2% compared to yesterday’s expectations of 30%.
In addition, the market is now also assigning a 38.2% probability to a range of 5% to 5.25%. For reference, investors had assigned a 36.5% chance yesterday.
Last updated: 2:03PM EST
Stocks continue to rally in today’s trading session. At the time of writing, the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.7%, 0.3%, and 0.2%, respectively. However, Bob Michele, CIO of JPMorgan Chase’s asset management arm, cautions of a potential financial storm, drawing parallels to the deceptive quiet during the 2008 financial crisis, according to a CNBC report.
He observes similar patterns now to past concerns regarding the stability of U.S. banks, the soothing effect of JPMorgan’s acquisition of a troubled competitor, and the subsequent three-month equity market rally.
This, coupled with the end of a prolonged period of cheap money and low-interest rates, gives rise to a possibly dangerous mix that has kept market observers on edge.
However, despite these concerns, the U.S. economy has displayed resilience, evidenced by a better-than-expected surge in May payroll figures and rising stocks. This has created a divide among investors. Michele, with his decades-long experience and oversight of more than $700 billion in assets, perceives the situation as the calm before the storm.
He predicts a likely recession by the year’s end, mainly because of the Fed’s most aggressive rate increases in 40 years and the process of quantitative tightening. Michele anticipates the hardest hit areas to be regional banks, commercial real estate, and junk-rated corporate borrowers, predicting a reckoning for each.
Last updated: 11:27AM EST
Stock indices are in the green so far in today’s trading session. At the time of writing, the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.5%, 0.2%, and 0.1%, respectively.
Last updated: 9:30AM EST
Stocks were mixed at open on Friday, with the Nasdaq 100 (NDX) and the S&P 500 (SPX) rising by 0.5% and 0.21%, respectively, while the Dow Jones Industrial Average (DJIA) was down by 0.1%, at 9:30 a.m., EST, June 9.
The S&P 500 seemed to be firmly in the bull territory after the index notched its highest close of the year.
First published:4:35AM EST
U.S. Futures are trending down on Friday morning after all three indices witnessed a sharp rally yesterday. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.16%, 0.18%, and 0.20%, respectively, at 4:00 a.m., EST, June 9.
The broader index (SPX) closed Thursday at its highest level for 2023 so far. The major indices are poised to finish the trading week on a positive note today, with the S&P 500 having its fourth consecutive positive week and the Dow witnessing its second positive week in a row.
The initial jobless claims for the week ending June 3 came in much higher than expected at 261,000, hinting that the Fed may keep the interest rate unchanged at its June 14 meeting since the labor markets have started showing weakness. Even so, the Fed will closely monitor the consumer price index (CPI) and producer price index (PPI) numbers due on June 13 and 14, respectively, before making any firm decision on rate hikes.
Meanwhile, the Chinese electric vehicle (EV) manufacturer Nio (NYSE:NIO) is scheduled to report its first-quarter results on June 9. The company failed to impress investors with its recent sales numbers, as rising competition and macro pressures continue to weigh on EV demand. However, Wall Street is looking beyond the ongoing weakness and upcoming Q1 results and remains bullish about Nio’s long-term prospects.
Elsewhere, European indices are trading mixed today after reports of the eurozone entering a technical recession in the first quarter of the year. The revised estimates from Eurostat released yesterday show that the eurozone reported a gross domestic product (GDP) of -0.1% for the quarter after Germany and Ireland revised their growth rates lower.
Asia-Pacific Markets End Higher on Friday
Asia-Pacific indices ended trading higher today following a steep decline of 4.6% year-over-year in China’s producer price index for May, signaling a cooling Chinese economy. The consumer price index for May also showed a modest rise of 0.2%, against the expected 0.3% increase.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices ended the day up 0.47%, 0.55%, and 0.66%, respectively.
At the same time, Japan’s Nikkei and Topix indices ended up 1.97% and 1.50%, respectively.
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