Wall Street positive on the eve of Inflation Day. US equities are trying to lengthen the bullish trail that yesterday saw the Nasdaq collect the third consecutive session of gains.
At approximately 1.45 pm Italian time, the Dow Jones rose by 137 points (+0.41%) to 33,849 points; the Nasdaq advanced 0.64% to 10,814, while the S&P 500 rallied 0.63% to 3,943.
Yesterday, the Nasdaq Composite technology index rose by 1.01%. The S&P 500 and the Dow Jones also performed well, closing respectively up by 0.70% and 0.56%, confirming the positive trend on Wall Street since the beginning of 2023.
In general, the sentiment shifts from the euphoria of the beginning of the year to more cautious.
Interviewed by CNBC Matthew Palazzolo, senior investment strategist at Bernstein Private Wealth Management, pointed out that “trying to understand when the Fed will start to cut rates will be difficult”.
“There is evidence that when the Fed starts to cut rates, the markets improve – continued the strategist – But, regardless of whether this happens in 2024 or towards the end of 2023, at least right now the situation is really too difficult”.
An assist to the markets, in anticipation of tomorrow’s Inflation Day, comes from the trend in Treasury yields: 10-year US Treasury rates fall to 3.578% while those of 2-year Treasuries fall to 4.247%.
Tomorrow Thursday January 12 will be a crucial day for Wall Street:
from the US macro front, in fact, the consumer price index for December will be announced, which will give important indications on the inflation trend in the United States, also providing some signals on the possible next moves by Jerome Powell’s Fed.
Economists polled by Bloomberg expect a headline CPI consumer price index up 6.6% year-on-year, up from +7.1% in November, and a virtually flat month-on-month trend.
The core CPI is also expected to slow on an annual basis, up 5.7% in December after 6% in December. On a monthly basis, the core component of the US consumer price index is instead expected to strengthen by 0.3%, after +0.2% in November.
Investor enthusiasm has been curbed in recent days by the statements of some Fed officials.
San Francisco Fed Chair Mary Daly said she believes the Federal Reserve will raise fed funds rates to above 5%, while Atlanta Fed Chairman Raphael Bostic stressed that, in his view, the bank Central America led by Jerome Powell should raise rates above the 5% threshold by the beginning of the second quarter of this year, and then keep them at that level ‘for a long period of time’. Even more hawkish are the forecasts of Jamie Dimon, number one at JP Morgan, who said he believes that the Fed’s terminal rate could even be confirmed at 6%.
Yesterday Fed Chairman Jerome Powell also spoke: in a speech on the independence of the American central bank, delivered in Stockholm, Sweden, on the occasion of the Symposium on Central Bank Independence, Powell remarked that stable inflation is the foundation of a healthy economy.
The number one of the American Central Bank also underlined that the pursuit of this objective may require institutions to adopt measures (such as raising rates) that are necessary, but not popular.
Apple in the spotlight after Bloomberg’s rumors that the iPhone giant will start producing its own screens for its electronic devices from 2024.
In Asia, the shares of some supplier companies of the American giant fell. Apple stock reports slight progress.