Stocks rose as further signals that inflation was easing fueled speculation about a tapering of Federal Reserve rate hikes.
Technology fuels the rebound in equities, keeping the S&P 500 up 7.9% in 2019, on track for the second best January since the turn of the century. jumped on the bullish forecast, but Intel Corp. fell after predicting one of his worst quarters in history.
The Federal Reserve’s preferred inflation eased in December, the slowest annual pace in over a year, and spending fell. US inflation expectations continued to fall in late January, helping to boost consumer sentiment, according to another University of Michigan data.
Central banks are watching the long-term outlook especially closely as expectations can become self-fulfilling and lead to higher prices.
Former Treasury Secretary Lawrence Summers has urged the Fed to refrain from suggesting the next move after next week’s rate hike is expected because the economic outlook is so uncertain.
Expectations are high for the Fed to deliver a 25 basis point hike on Feb. 1, moving away from last year’s bigger move, but expectations for a rate cut at the end of 2023 are “a step too far,” says product chief Erick Muller. said. Muzinich & Co. Investment Strategy
“The Fed will say, ‘We’re in the final stages, but listen carefully, we’re going to keep raising rates,’” Mr. Mueller said. “Much of interest rate volatility will depend on the trajectory of inflation from here.”
Company Highlights:
- Chevron Corp. has announced disappointing results just days after surprising investors with a massive $75 billion share buyback program.
- Colgate-Palmolive Co. saw lower-than-expected sales of personal-care and household products at the end of last year.
- Goodyear Tire & Rubber will cut about 500 jobs in response to weak demand and rising inflation.
- Hasbro Inc., one of the world’s largest toy makers, has announced it will cut 15% of its workforce after a disappointing holiday shopping season.
U.S. stocks have plunged this year in the face of many dire signs, from recession fears to weak earnings. However, a peek into the trading activity behind the benchmarks suggests that the bullish move is not convincing.
Inflows into the SPDR S&P 500 ETF Trust (ticker SPY) have been on pace to see net inflows in January after investors sold assets for the second month in a row, while weekly inflows It shows a steady decline in the total amount of funding available. Moon. The inflows into his two other major funds that track the S&P 500, the Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) tell a similar story.
The S&P 500 is up about 6% this month. If history is your guide, the gauge too he could turn green on December 31st, as the first month’s direction (gain or loss) aligns with the yearly. It is two-thirds as likely as it has been since 1973.
Positive and positive periods resulted in an average increase of 20% for the full year, while negative and negative years typically saw a 17% decrease.
Bloomberg News’ Rita Nazareth reports.
Copyright 2023 Bloomberg. all rights reserved. This material may not be published, broadcast, rewritten or redistributed.
