by 9 minutes ago
Bowman sees Fed “far from” inflation target and points to further rate hikes
Federal Reserve Governor Michelle Bowman expects interest rates to keep rising until the central bank makes further progress in fighting inflation.
In a speech Monday morning, Bowman gave no specific forecast for stock prices. However, she pointed out that after eight increases since March 2022, there was still more to do.
“We are still a long way from achieving price stability and I expect it will be necessary to further tighten monetary policy to bring inflation down towards our goal,” she said in a speech to American Banking Conference in Orlando, Fla.
“While there are costs and risks to tightening monetary policy to bring down inflation, I see the costs and risks of sustained inflation as far greater,” she said.
Bowman also spoke on banking regulation, saying she doesn’t think it’s the Fed’s job to tell institutions which sectors to lend to. Congressional Democrats have urged the Fed to halt lending to fossil-fuel companies.
– Jeff Cox
19 minutes ago
Recent stock decline could be pause refreshing growth; Oppenheimer
According to Oppenheimer’s John Stoltzfus, last week’s dismal stock performance could be a pause that will eventually refresh the market’s bullish trend. It can also be a good opportunity for investors to top up their portfolios with winners who are poised to win.
“We remain positive on equities and view the current retracement as an opportunity for investors to look for ‘babies thrown out with the bathwater,'” Stoltzfus wrote in a note Monday, referring to high-quality stocks that are growing the market will be sold out downdrafts.
“In our experience of nearly four decades in the markets, fed fund cycles that take time to work out are never easy to experience, but can be rewarding for investors who exercise diversification and patience,” he added.
One of the firm’s favorite investment mantras at such times is, “Know what you own and why you own it in relation to your investment goals, objectives and risk tolerance, and set your expectations correctly.” The advice is particularly beneficial, according to the release at a time when markets are adjusting to a new normal.
– Carmen Reinicke
Before an hour
Morgan Stanley downgrades logistics stock XPO
Morgan Stanley downgraded XPO shares to equal weight from overweight, citing a disappointing fourth-quarter report.
“The 4Q print has been tougher than expected and we think the stock could be in a ‘penalty box’ for a while as the market looks for more evidence of execution and traction towards LT targets,” Morgan Stanley said in a message on Monday.
– Sarah Min
2 hours ago
According to JPMorgan, the first quarter will mark a peak for equities
Stocks have been on the upswing since October, with the S&P 500 up 14.4% after hitting a closing low of 3,577 on Oct. 12. However, JPMorgan doesn’t think the good times will last.
“Big picture, we think the equity rally that started last October, which we hoped would be driven by bond yield/CPI highs, China reopening and European gas price declines, is unlikely to provide fundamental confirmation for the Leg will get higher next year,” equity strategist Mislav Matejka wrote in a note on Monday. “Q1 should mark the peak of the market in our view.”
Matejka also noted that he prefers international stocks to their US counterparts as the technology sector is likely to continue to struggle going forward.
See grafic…
shares since October
“We don’t think the US will be a good place to hide this time around as technology moves from secular to cyclical,” he said. “Despite our view that bond yields will peak from October, when we advised closing short positions in tech, the sector is unlikely to be a sustained leader; it’s still valued not far from all-time highs.”
“This is not a good starting point. Also, we don’t think tech will be immune to potential earnings disappointments in a downturn, unlike it has been over the past decade.”
– Fred Imbert, Michael Bloom
13 hours ago
Investors will be keeping an eye out for the latest CPI data this week
Investors are looking to Tuesday’s CPI data, as well as retail sales for the latest gauge of inflation.
Economists polled by Dow Jones are forecasting a 0.4% monthly increase in headline CPI and a 6.2% year-on-year increase.
Traders will watch the CPI reading to better understand how the Federal Reserve will proceed with monetary policy in the fight against inflation.
— Hakyung Kim
13 hours ago
Where the big averages stand
The big averages all come from losing weeks.
The S&P and Nasdaq posted their biggest weekly losses since December, down 1.11% and 2.41%, respectively. Although the Dow was on an uptrend on Friday, it also ended down 0.17%.
The Dow recorded the smallest gain since the beginning of the year with a plus of 2.18%. Meanwhile, the S&P is 6.54% off its record and the Nasdaq is 12.82% off its record.
— Hakyung Kim
14 hours ago
Dow and S&P 500 futures open unchanged on Sunday
S&P 500 futures opened at 4,097.50 after the benchmark index closed at 4,136.48 on Friday. Futures linked to the Dow Jones Industrial Average opened Sunday night at 33,897 after the index ended Friday’s session at 33,869.27.
Nasdaq 100 futures traded at 12,334. The Nasdaq Composite ended Friday’s session at 11,718.12.
— Hakyung Kim
