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cut interest rates

Nasdaq CEO Warns Fed Against Premature Interest Rate Cut – Market Confidence and IPOs Impacted

by Chief editor of world-today-news.com January 17, 2024

written by Chief editor of world-today-news.com

USANasdaqExchange CEO Adena Friedman warned on Tuesday (16th) that the Federal Reserve should be wary of cutting interest rates prematurely.

Friedman told the World Economic Forum in Davos, Switzerland, that while “there are a lot of signals that the Fed should cut interest rates this year, the question is ‘when are they going to do it?’ If I were one of them, I would be a little worried about starting to get a rate cut.” Too early.’”

She explained that while inflation is moving in the “right direction,” the Fed also expects it to slow, making it more difficult to cut interest rates.

Friedman said the Fed also wants to make sure they believe rates have reached a stable state before starting to make major moves in the area.

The Federal Reserve kept interest rates unchanged for the third consecutive time in December, keeping the federal funds rate range at 5.25%-5.5%. Federal Open Market Committee (FOMC) members predict that three rate cuts are likely in 2024. Previously, between March 2022 and July 2023, the Federal Open Market Committee (FOMC) raised interest rates 11 times in a row in response to rising inflation.

Have more confidence in the market

As markets predict when interest rates may be cut and when the cost of capital may fall, investors can start thinking about how to more successfully model a company’s future earnings, she said.

Additionally, knowing that inflation is falling and business costs are moderating will give businesses more confidence, Friedman said.

“I think all of this is going to increase market confidence, and that will certainly be reflected in market valuations,” Friedman said. “While the market performance was low and then high last year, there is a broader improvement in valuations, including for companies with lower valuations.”

“I think it will also spark interest from investors who want to put their venture capital to work, which means … we can actually get the initial public offering (IPO) market open again,” she said, adding that about 85 companies The IPO market has been opened, applications can be made inNasdaqListed.

2024-01-16 22:20:03
#Davos #Forum #Nasdaq #CEO #Fed #wary #premature #interest #rate #cuts #Anue #Juheng #Stock #Radar

January 17, 2024 0 comments

Business

U.S. Treasury Yields Survey: Analysts Predict Fluctuations and a Second-Half Decline

by Chief editor of world-today-news.com January 10, 2024

written by Chief editor of world-today-news.com

A Reuters survey of bond strategists showed that U.S. Treasury yields will fluctuate around current levels in the next six months and then fall in the second half of the year, indicating that the market has fully digested the impact of the Federal Reserve’s interest rate cut.

Since hitting a high of 5.02% in October, the benchmark U.S. 10-Year Treasury Bond YieldIt has fallen more than 120 basis points, ending 2023 roughly where it started the year.

Bond bulls have priced in about 150 basis points of rate cuts this year after the Federal Reserve turned dovish and inflation slowed, pushing yields lower. Yields move inversely to prices.

The interest rate later returned to around 4%, up more than 20 basis points from the low of 3.78% in late December, as upcoming economic data showed that the United States was still growing at a healthy pace and did not require an immediate rate cut.

Interest rate futures are now pricing in a roughly two-thirds chance of a first rate cut in March, down from nearly 90% two weeks ago. The Fed’s own dot-plot forecast points to 75 basis points of rate cuts this year.

A Reuters survey of 62 bond strategists from January 5 to 10 found that the rebound in yields is expected to continue. 10-Year Treasury Bond YieldIt will rise about 10 basis points to 4.10% in 3 months; 15 basis points lower than the December survey.

Steven Major, global head of fixed income research at HSBC, said: “Our forecast is that yields will remain unchanged in the first three months; although this does sound boring, this is how bonds work.”

He added: “I feel very strongly that the next big move in yields will be lower and will occur in the second half of the year as the market needs to see actual actions from central banks rather than pure expectations.”

The survey found that indicators 10-Year Treasury Bond YieldIt is expected to fall to 3.93% by the end of June and then to 3.75% by the end of the year. The smaller sample of U.S. primary transaction banks forecast higher, at 4.00% and 3.88% respectively.

“You’re going to have a double peak,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. “One is a classic late-cycle recession, and the other is lower interest rates that boost productivity and lead to stronger economic growth.”

He added: “The midpoint between these two scenarios could lead to 10-Year Treasury Bond YieldIt will rise to around 4.70% at the end of 2024. ” This is the highest year-end forecast in the survey.

The 2-year Treasury yield, the most sensitive to interest rates, is currently about 4.35% and is expected to remain stable over the next three months before falling to 4.00% by the end of June and falling a further 50 basis points to 3.50% by the end of the year.

If realized, the 2-year period and 10-Year Treasury Bond YieldThe interest rate inversion between the two will disappear completely, with a positive interest rate differential of 25 basis points by the end of 2024. Negative interest rate differentials often signal an impending recession.

“As an indicator that was not helpful in predicting a recession last year, it may not be helpful this year,” said Shlok, chief economist at Apollo Global Management.

“Treasury inflows will put considerable upward pressure on long-term interest rates for reasons that have nothing to do with whether we are in recession,” he added, citing factors such as the U.S. budget deficit and the risk of a resurgence in inflation that could keep yields higher.

2024-01-10 12:01:04
#Reuters #survey #U.S #bond #yields #remained #flat #fell #Anue #JuhengU.S #Stock #Radar

January 10, 2024 0 comments

Business

U.S. Stocks Open Lower as Rising Bond Yields Pressure Large-Cap Stocks and Traders Lower Expectations for Rate Cut

by Chief editor of world-today-news.com January 9, 2024

written by Chief editor of world-today-news.com

Major U.S. stock indexes opened lower on Tuesday (9th), with rising U.S. bond yields putting pressure on large-cap stocks as traders lowered expectations for a central bank interest rate cut ahead of a major inflation report later this week.

before deadline,Dow Jones Industrial Averagefell more than 300 points or nearly 0.8%,Nasdaq Composite Indexfell more than 100 points or nearly 0.8%,S&P 500 Indexfell nearly 0.7%,Philadelphia SemiconductorThe index fell nearly 1%.

U.S. stocks and bonds fell as a rebound driven by technology stocks faded and investors returned to worry about risks such as inflation and bond volatility. Major futures indexes were lower before U.S. stocks opened, with technology stocks giving back some of yesterday’s gains.

The U.S. inflation report to be released on Thursday (11th) and the earnings season starting on Friday (12th) will keep investors on the sidelines. Meanwhile, many are making room in their portfolios to absorb Tuesday’s tsunami of debt supply.A record of at least 43 billionEUR ($47 billion) of new publicly syndicated debt will be priced on Tuesday, with the final total likely to be higher. These debts originate from financial, corporate and public sector borrowers.

“The new year is already testing the 2023 Christmas rally,” said Mizuho International strategist Evelyne Gomez-Liechti, citing pressures including an unexpectedly strong U.S. labor force, an overdone rally and new government and corporate debt. Oversupply.

US benchmark 10-Year Treasury Bond Yieldremained above 4%, even as strong labor market data last week prompted traders to reduce their bets on rapid easing of monetary policy by the Federal Reserve. 10-year yieldIt surged 17 basis points, but former bond king Bill Gross still called this level “overvalued.”

On the energy front, international oil prices rebounded from their biggest decline in about a month on signs of weakness in the physical market, including sharp price cuts by OPEC+ leader Saudi Arabia.

In other news,BitcoinTrading prices fell after surging above $47,000 as investors bet the U.S. is preparing to approve the first trancheBitcoinSpot ETFs.

As of 22:00 Taipei time on Tuesday (9th): Focus stocks:

Microsoft (MSFT-US) shares fell 0.59% in early trading to $372.46 per share

According to foreign media reports on Tuesday (9th), Microsoft’s $13 billion investment in OpenAI may face a comprehensive merger investigation by the European Union after the latter’s high-level personnel turmoil exposed the deep ties between the two companies.

Mobileye(MBLY-US) shares fell 0.13% in early trading to $31.39 per share

US chip maker Intel (INTC-US)’s autonomous driving technology company Mobileye will provide advanced driver assistance system (ADAS) technology for Indian automaker Mahindra & Mahindra’s next-generation cars as the company focuses on the growth of the Indian auto market.

Amazon (AMZN-US) shares fell 0.01% in early trading to $149.08 per share

Workers at Amazon’s new distribution center in Birmingham have voted to join the company’s ongoing strike action over pay and working conditions, Britain’s GMB union said on Tuesday. GMB said warehouse workers will go on strike on January 25, but the news has not yet been officially recognized by the US e-commerce giant. It is also unclear how many workers will participate in the strike.

Today’s key economic data:

none

Wall Street analysis:

Bob Michele, global head of fixed income at JPMorgan Asset Management, recently said that the Fed is likely to cut interest rates by up to 250 basis points by 2024. What the Fed did to ensure the U.S. economy maintained a soft landing: they gradually began lowering the federal funds rate. Otherwise, interest rates will become too powerful a headwind.

2024-01-09 14:46:59
#U.S #stocks #early #trading #U.S #bond #yields #climbed #major #indexes #opened #Anue #JuhengU.S #Stock #Radar

January 9, 2024 0 comments

Business

U.S. Economic Data Better Than Expected, U.S. Bond Market Reacts with Selling Wave

by Chief editor of world-today-news.com January 8, 2024

written by Chief editor of world-today-news.com

A number of U.S. economic data were better than expected. U.S. Treasury Secretary Yellen bluntly stated that the economy has achieved a soft landing, which drove U.S. stocks to close higher on the 5th, and U.S. bonds set off a selling wave. Among them,10-year U.S. Treasury yieldStanding above 4%, long-term U.S. bond ETFs related to Taiwan stocks weakened in response. Selling pressure emerged as soon as the market opened today (8th). As of midday, many stocks fell by more than 1%.

Yuanta U.S. Bond 20 Years (00679B-TW) fell more than 1% intraday, facing a battle to defend the 30 yuan level, the lowest in nearly a month; Cathay 20-year U.S. Treasury Bonds (00687B-TW), Fubon U.S. Bond 20 Years (00696B-TW), Qunyi 25-year U.S. Bond (00764B-TW), KGI US Bond 25+ (00779B-TW), unified U.S. debt for 20 years (00931B-TW) and other stocks also fell by more than 1%, which is a relatively weak group among Taiwan stock ETFs.

Data from the U.S. Department of Labor showed that non-farm employment increased by 216,000 people in December last year, far exceeding market expectations of 170,000. The previous value was significantly revised down to 173,000. The unemployment rate fell to 3.7%, lower than market expectations of 3.8% and the same as the previous value. Such hot economic data dampened traders’ expectations that the Federal Reserve (Fed) would start cutting interest rates as soon as March.

The futures market has adjusted its expectations, and the probability of the Federal Reserve cutting interest rates in March has dropped to about 65%. Against this background, U.S. debt has set off a wave of selling.10-year U.S. Treasury yieldAfter climbing on Thursday, it rose about 5 basis points to 4.04%, rising by 16.67 basis points this week.

Looking ahead, the market will turn its focus to the latest inflation data, with the U.S. Consumer Price Index (CPI) report scheduled for release next Thursday.

Eastspring Investment Trust said that the dot plot indicates that this cycle of interest rate hikes has ended; the experience of stopping interest rate hikes in the past five times shows that the average performance of U.S. investment grade bonds is higher than that of U.S. government bonds and non-investment grade bonds. The current layout of investment grade bonds is It is a good time, and it is recommended that investors step up their involvement to grasp the market outlook.

Eastspring Investment – The high-quality corporate bond fund research team stated that due to the hawkish attitude of the Federal Reserve and the uncertainty of the political and economic situation, bond yields have risen, causing the 100-dollar quotation of investment-grade bonds to plummet, once falling to 90 US dollars. below; although the current yield rate has fallen and the quotation has rebounded, it is still at a rare level below $95, which is a relatively worthy price point.

Eastspring Investment – The high-quality corporate bond fund research team further pointed out that bond prices have “mean reversion” characteristics. As long as the bond does not default, no matter how the price fluctuates, it will eventually return to 100 yuan; while the default rate of investment grade bonds is low, in 1998 The average default rate since the beginning of this year is 0.09%, with a maximum of no more than 0.4%. Therefore, as long as there are opportunities to buy at a discount, profits are worth looking forward to. It is recommended that investors start planning.

2024-01-08 03:26:03
#Focus #Stocks #U.S #Treasuries #facing #selling #pressure #Taiwan #Longterm #Bond #ETF #fell #Anue #JuhengETF

January 8, 2024 0 comments

Business

U.S. Federal Reserve’s Balance Sheet Reduction Policy and U.S. Government Bonds in 2023: What You Need to Know

by Chief editor of world-today-news.com January 6, 2024

written by Chief editor of world-today-news.com

The U.S. Federal Reserve’s (Fed) balance sheet reduction policy may end this year, which is a good reason for U.S. government bonds to continue their gains in 2023, but the positive effects may be offset by factors such as the fiscal deficit.

Minutes of the Fed’s December 12-13 meeting released earlier this week showed that some officials have begun discussing the conditions for ending the reduction in cash and bond positions. Under this policy, known as quantitative tightening (QT), the Fed allowed principal in Treasuries and mortgage-backed securities (MBS) to mature, reducing the balance sheet by nearly $100 billion each month.

So far, the Fed has implemented QT, which has reduced the total by more than 1 trillion US dollars, and as of December 27, the total size has dropped to 7.764 trillion US dollars.

Some market participants said that for U.S. debt, the QT is about to end, which is seen as another positive thing in addition to the Fed’s move to cut interest rates. Driven by expectations of interest rate cuts,10-Year Treasury Bond YieldIt has retreated more than 100 basis points from the 16-year high hit in October last year, representing a reverse upward trend in prices. It also reversed what would have been an unprecedented third consecutive year of declines in U.S. debt.

However, market participants also pointed out that the U.S. fiscal deficit is expected to swell to US$20 trillion over the next decade, as well as the potential reduction in demand from major foreign buyers, which has restrained the possible gains in U.S. debt.

“The QT deceleration is more negative, but I think the deterioration in fiscal conditions has a bigger impact,” said Vishal Khanduja, co-head of fixed income broad markets at Morgan Stanley Investment Management.

Another thing worth noting is that the timing of the end of QT may be difficult to determine, and it usually does not necessarily occur at the same time as a rate cut.

Analysts at Deutsche Bank said on Thursday (4th) that they predict that the U.S. economy may be in recession, and if the Fed cuts interest rates in response to this, QT may end as soon as June. On the other hand, if the U.S. economy achieves a soft landing, where growth is strong and inflation cools, QT could extend into next year.

The Fed’s survey of primary traders at its December meeting was more conservative. According to the survey results released on Thursday, these large Wall Street banks surveyed predicted that the Fed may not end its balance sheet reduction until December this year, which is more than originally expected. The time point is later.

Matthew Miskin, co-investment strategist at John Hancock Investment Management, said the Fed’s balance sheet measures may be synchronized with interest rate adjustments, but a better-than-expected non-farm payrolls report like Friday’s is consistent with the logic of shrinking the balance sheet in the short term. conflict.

He said: “While ending QT is positive for U.S. debt, QT policy itself is a mystery and the effect is usually not as significant as people think.”

2024-01-06 06:02:12
#Feds #balance #sheet #reduction #year #U.S #debt #necessarily #benefit #Anue #Juheng #Stock #Radar

January 6, 2024 0 comments

Business

U.S. Stock Indexes Mixed as Job Market Resilience Cools Rate Cut Expectations by Fed

by Chief editor of world-today-news.com January 4, 2024

written by Chief editor of world-today-news.com

Major U.S. stock indexes opened mixed on Thursday (4th) after the latest data released by the U.S. showed that the job market remains resilient, cooling market expectations for an early interest rate cut by the Federal Reserve (Fed).

before deadline,Dow Jones Industrial Averagerose more than 90 points or nearly 0.3%,Nasdaq Composite Indexfell more than 40 points or nearly 0.3%.S&P 500 Indexrose nearly 0.04%,Philadelphia SemiconductorThe index fell more than 1%.

U.S. Treasury yields rose across the board and the dollar stabilized after four consecutive days of gains after strong U.S. employment data raised concerns about the Federal Reserve’s path to cutting interest rates.

S&P 500 IndexFutures were little changed after ending a three-day sell-off yesterday.Nasdaq 100 futures fell after Apple suffered its second downgrade this week. U.S. Treasury bond prices extended losses after ADP reported higher-than-expected job creation in December and lower-than-expected jobless claims last week.

Specifically, in December last year, the number of ADP employees, known as “small non-agricultural workers”, increased by 164,000, far exceeding market expectations of 115,000, and the previous value was 101,000; the number of people receiving unemployment benefits at the beginning of last week was 202,000, which was lower than Expected 216,000, the previous value was 220,000.

The consensus among investors is that the market is overdue for a pullback after stocks soared late last year.Nasdaq The 100 index fell nearly 3% in two days this month, and swaps traders have been reining in their bets on rate cuts.

“This confirms that things are not going to move as quickly as some hoped. What needs to be accepted is that the Fed is still very driven by inflation and economic data,” said Lindsay James, investment strategy at Quilter Investors.

In terms of energy, West German crude oil futures traded above US$73 per barrel this week, mainly due to supply disruptions in Libya;Brent crude oilFutures are trading at nearly $79 a barrel.

As of 22:00 Taipei time on Thursday (4th): Focus stocks:

apple (AAPL-US) shares fell 0.95% in early trading to $182.50 per share

According to foreign media reports on Thursday, Apple has become the most unpopular large technology stock on Wall Street and has once again been downgraded by another investment bank. This move not only revealed Wall Street’s growing concerns about Apple’s iPhone sales, but also highlighted the cautious attitude of analysts. .

Mobileye(MBLY-US) shares fell 27.34% in early trading to $28.86 per share

US chip maker Intel (INTC-US)’s autonomous driving technology company Mobileye warned on Thursday that reduced orders due to customers clearing excess inventory would hit revenue this year. Shares of automotive chip suppliers sold off after the news broke.

Walgreens(WBA-US) shares fell 8.02% in early trading to $23.49 per share

Walgreens, the drug and cosmetics retail giant, announced its first-quarter financial results for fiscal year 2024 before the U.S. stock market opened on Thursday. Due to its strong performance in its pharmacy business, revenue increased by 10% in the quarter and its profit performance was also outstanding, both beating Wall Street. analysts expected. It is worth noting that the company announced a quarterly dividend reduction for the first time in nearly 50 years to save cash.

Today’s key economic data:

U.S. ADP added 164,000 jobs in December last year, compared with expectations of 115,000, and the revised previous value of 101,000
The number of people claiming initial unemployment benefits in the United States last week was 202,000, compared with expectations of 216,000, and the revised previous value of 220,000
The number of people continuing to receive unemployment benefits in the United States last week was 1.855 million, which was expected to be 1.883 million. The revised previous value was 1.886 million.
The final value of the Markit Comprehensive PMI in the United States in December last year was 50.9, which was expected to be 51.0, and the previous value was 50.7
The final value of the Markit services PMI in the United States in December last year was 51.4, which was expected to be 51.3 and the previous value was 50.8.

Wall Street analysis:

Peter Cardillo, chief market economist at Spartan Capital Securities, said today’s ADP and unemployment benefits data put a question mark on whether tomorrow’s non-farm payrolls report will exceed market expectations. While today’s data is favorable for those looking forward to a soft landing for the U.S. economy, U.S. stocks have already experienced a sharp rebound and are now experiencing a technical correction.

2024-01-04 14:43:14
#U.S #stocks #early #tradingSmall #nonfarm #payrolls #report #strong #major #indexes #mixed #Anue #JuhengU.S #Stock #Radar

January 4, 2024 0 comments

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