(Bloomberg) — Stocks rose as inflation showed more signs of easing, making the case for the Federal Reserve to continue to slow the pace of rate hikes and prevent a more severe downturn. -os in the economy.
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After facing many twists and turns, the S&P 500 pushed higher again, rising for the third consecutive session. Treasury two-year yields fell 11 basis points. The dollar is hovering near its lowest level since June. Swaps have moved to indicate less than 50 basis points of rate tightening at the next two Fed meetings – meaning little chance of no move in March.
The consumer price index, paired with prior months’ lower-than-expected readings, could pave the way for the Fed to downshift to a quarter-point hike at its next meeting. ends on February 1. That said, the work of the central bank is far from the top. Strong consumer demand, especially for services, paired with a tight labor market threatens to continue to put upward pressure on prices.
“The December CPI report landed in the zone that we are confident is consistent with the Fed slowing the pace of rate hikes again to 25bp in February, although we expect the Fed to try to make it a ‘hawkish 25’,” said Krishna Guha of Evercore ISI.
Fed Bank of Philadelphia President Patrick Harker said the central bank should raise rates in quarter-point increments “progressively” as it nears the end of its most aggressive tightening campaign in decades. .
In corporate news, American Airlines Group Inc. said fourth-quarter revenue and earnings exceeded expectations, helped by strong holiday travel demand. Twitter Inc.’s office workers were told. in Singapore to clear their desks and leave the area, people familiar with the situation said, as Elon Musk continues to cut costs around the world.
Main events this week:
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China trade, Friday
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US University of Michigan consumer sentiment, Friday
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Citigroup, JPMorgan, Wells Fargo report earnings, Friday
This week’s MLIVE Pulse Survey:
Some of the main movements in the markets:
Stocks
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The S&P 500 was up 0.2% at 10:27 a.m. in New York
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The Nasdaq 100 rose 0.1%
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The Dow Jones Industrial Average rose 0.4%
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The Stoxx Europe 600 rose 0.8%
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The MSCI World index rose 0.5%
Money
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The Bloomberg Dollar Spot Index fell 0.5%
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The euro rose 0.4% to $1.0800
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The British pound was little changed at $1.2152
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The Japanese yen rose 1.7% to 130.17 per dollar
Cryptocurrencies
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Bitcoin rose 3% to $18,095.77
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Ether rose 3.1% to $1,384.21
Bonds
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The yield on 10-year Treasuries fell two basis points to 3.52%
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Germany’s 10-year yield fell four basis points to 2.17%
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Britain’s 10-year yield fell six basis points to 3.34%
Commodities
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West Texas Intermediate crude rose 1% to $78.21 a barrel
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Gold futures rose 0.7% to $1,891.60 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Emily Graffeo.
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