You want to go a little bit slower and be a little bit more careful.”
Powell emphasized that the Fed is data-dependent and will continue to monitor economic indicators to guide their decision-making process.
Overall, the market reaction to the Fed’s decision on interest rates was swift and significant, with stocks tumbling and bond yields rising. Investors will continue to watch closely for any updates from the Fed as they navigate the economic landscape in the coming months.
3. Lee believes that the Federal Reserve’s decision could bring the markets out of this “zone of hesitation” and potentially trigger a breakout in either direction.
Overall, the Fed’s decision to cut interest rates by a quarter point and project two more cuts in 2025 reflects a cautious approach to monetary policy in response to economic conditions. Investors will be closely watching Powell’s press conference for further insights into the Fed’s thinking and future plans. The markets are eagerly awaiting the Federal Reserve’s decision this afternoon, with many analysts and investors believing that getting past this hurdle will be crucial for stocks to regain their momentum. Tom Lee, who has been calling for a year-end rally in markets, is optimistic that the rally will kick off post the Fed’s rate decision. Bank of America analysts also share a similar view, referring to today’s meeting as the “last hurdle” before the anticipated Santa Claus rally can take hold in markets.
As the Federal Reserve meeting approaches, markets are already pricing in a near 100% chance of a 25 basis point interest rate cut. However, recent data showing solid economic growth, a stable labor market, and inflation below the Fed’s 2% target have led many to expect that the Fed may cut rates by less than initially anticipated in 2025. Investors are now turning their focus to the Fed’s Summary of Economic Projections, particularly the “dot plot” which outlines policymakers’ expectations for future interest rates.
Despite expectations for the Fed to revise up its forecasts for inflation and economic growth in 2025, the Dow Jones Industrial Average has been on a downward trend, experiencing its worst losing streak in nearly 50 years. The Dow’s losses over the past nine trading days amount to roughly 3%, with the index not benefitting from the tech rally that has supported the S&P 500 and Nasdaq Composite. The construction of the Dow, with only a few tech stocks among its components, has contributed to its underperformance compared to other indices.
In the housing market, data from the Census Bureau revealed that housing starts fell in November to the lowest rate since July, driven by a decline in multifamily projects. Single-family construction, on the other hand, saw an increase. The outlook for builders remains uncertain as inventory of new homes for sale has reached a 17-year high, potentially limiting the upside for new home sales in the near term.
Amid concerns about growing competition in the AI chip space, Nvidia’s shares have fallen more than 10% over the past month. However, a report detailing Nvidia’s plan to compete with hyperscalers through cloud services has sparked investor interest, leading to a 3% increase in the stock price. The potential for Nvidia to generate significant revenue from software and cloud services could help the company maintain its position in the AI market.
On a positive note, the Dow opened higher after nine consecutive losing sessions, with investors eyeing a rebound in the markets. The Federal Reserve’s interest rate decision will be closely watched as it could provide further insight into the economic outlook for 2025.
Overall, the market remains cautiously optimistic as investors await the outcome of the Fed’s meeting and continue to monitor developments in various sectors such as housing and technology. The year-end rally in markets may hinge on the Fed’s decision and any surprises in the economic projections released later in the day. Entonces traduce al español y recupera solo el texto en español. Mantén las etiquetas HTML. No devuelvas la versión en inglés. No me la devuelvas a mí. No me devuelvas el texto enviado. Solo proporciona el texto en español.