U.S. Federal Reserve Chairman Jerome Powell participates in a panel discussion at the 24th Annual Jack Pollack Research Conference in Washington, DC on November 8, 2023.
Alex Wong | Getty Images News | Getty Images
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Fed Chairman Jerome Powell says it’s ‘premature’ to cut interest rates
Federal Reserve Chairman Jerome Powell on Friday declared victory over inflation and said it was premature to dismiss market expectations for interest rate cuts next year. “It is too early to confidently conclude that we have achieved a sufficiently restrictive stance or to speculate on when policy will be eased,” Powell said in his prepared remarks. Markets took his comments as dovish, causing stock prices to rise and Treasury yields to fall sharply.
S&P 500 rises to 2023 high
The S&P 500 rose 0.59% Friday to close at a new 2023 high, extending its strong gains since November. The Nasdaq Composite Index ended 0.55% higher and the Dow Jones Industrial Average ended 0.82% higher. Benchmark indexes closed at their highest since March 2022 as investors hoped the Fed would end its interest rate hikes. Europe’s Stoxx 600 index closed 1% higher on Friday, ending its best month since January.
$1.9 billion regional airline contract
Alaska Airlines has agreed to buy rival Hawaiian Airlines for $1.9 billion, as the airline pushes to expand along the West Coast. Alaska will pay Hawaiian $18 a share and assume $900 million in debt, the companies announced Sunday. The deal could also trigger new regulatory battles in a second proposed airline merger within two years.
Uber becomes an S&P 500 stock
Uber will be added to the S&P 500 index, replacing Sealed Air. This change will take place before the start of trading on December 18th. The ride-hailing company turned a profit on its delivery business faster than expected, and advertising revenue has also increased, contributing to Uber’s profitability.
[PRO] Morgan Stanley says Chinese version of Spotify is ‘undervalued’
Tencent Music Entertainment “Music Value” [is] “Despite the company convincing more people to pay for music in China, it remains undervalued,” Morgan Stanley said. Late 2018.
Wall Street got off to a strong start in December, with major averages posting their fifth consecutive week of gains on Friday.
This comes on the back of an impressive rally in November that saw the market snap a three-month losing streak, driven by expectations that the Fed is done raising interest rates and could start cutting them as early as the first half of next year. There is.
However, Federal Reserve Chairman Jerome Powell pushed back, calling interest rate cut negotiations “premature.” But stock markets were dejected by what traders perceived as a clearly dovish message from the central bank chief.
“There are three factors here. The first is inflation, the second is that the Fed appears to be on the sidelines, and the third is that things are starting to unfold at a very slow pace. It’s a cooling economy,” said Mona Mahajan, senior investment strategist at Edward Jones.
“It’s like Goldilocks cooling: not too hot, not too cold. And that’s exactly what the market is accepting.”
Powell’s comments strengthened the view that the Fed is at least done raising interest rates. Powell also said that inflation is “moving in the right direction.”
The Fed’s Dec. 13 meeting will help clear the air on interest rate plans.