Even though the U.S. Federal Reserve cut short term interest rates in the U.S. by a half point last month, longer term interest rates seem to have other ideas. Those rates increased in the past week. The bearish change spooked investors into backing off some of their recent bullish investments in stocks that would benefit from falling interest rates.
That change resulted in the S&P 500 (Index: SPX) falling by one percent from the record high it set a week earlier. The index closed at 5,805.03 on Friday, 27 October 2024.
That decrease pushed the trajectory of the S&P 500 closer to the middle of the alternative future chart's redzone forecast range. The latest update to the chart shows the level of the S&P is consistent with the redzone forecast, which now has just one more week to go.
Here are the past week's market-moving headlines.
- Monday, 21 October 2024
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- Signs and portents for the U.S. economy:
- Oil prices rise nearly 2%, recovers some of last week's 7% decline
- Speedy US corn and soy harvests strain farmers, storage capacity
- Why Are Long-Term Bond Yields Rising Despite Rate Cuts?
- Fed minions talk up modest rate cuts along with balance sheet reduction, say more weakness in job market would make them cut rates faster:
- Fed's Logan eyes more gradual rate cuts amid more balance sheet cuts
- Fed's Kashkari: Job market weakness could mean faster rate-cut pace
- Bigger stimulus developing in China:
- Dow, S&P, Nasdaq close mixed as attention shifts to earnings
- Tuesday, 22 October 2024
-
- Signs and portents for the U.S. economy:
- Fed minions excited to cut rates, not sure how fast:
- Four Fed policymakers favor more rate cuts, but differ on pace
- Fed needs to continue to cut rates, Daly says
- Mixed signals developing in China:
- China's youth unemployment rate falls after climbing for two straight months
- China's Singles' Day sales festival fails to inspire consumers
- China stimulus slammed as inadequate by U.S., IMF officials counting on them:
- ECB minions claim Eurozone inflation is going exactly as they expect, say they need to communicate better:
- No signs that euro zone inflation will deviate from current projections, ECB's Escriva says
- ECB's Kazimir: increasingly confident in disinflation path
- ECB needs clearer communication - but not dot plots, Nagel says
- Wall St closes little changed while investors digest yields, earnings
- Wednesday, 23 October 2024
-
- Signs and portents for the U.S. economy:
- The elusive number keeping Treasury yields at their highest levels in 3 months
- Oil prices rise more than 1% amid concerns on Mideast tensions
- US existing home sales slide to 14-year low; prices stay elevated
- Fed minions starting to worry about "extend and pretend" banking practices on bad loans:
- NY Fed says banks obscuring commercial real estate risks by extending loan terms
- Fed hawks and doves: what US central bankers are saying
- Bigger stimulus developing in China:
- BOJ minions think inflation is running behind their schedule:
- ECB minions thinking about whether they need to deliver bigger rate cuts in Eurozone:
- Wall Street closes down, pressured by tech losses and worries about rates
- Thursday, 24 October 2024
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- Signs and portents for the U.S. economy:
- US labor market plodding along, but jobs becoming more scarce
- US 30-year fixed-rate mortgage rises to 6.54%
- Why mortgage rates are back up to nearly 7%
- 10-year Treasury yield slips from 3-month closing high as buyers step in
- US new home sales highest in nearly 1-1/2 years in September
- Fed minions starting to think inflation may still be a problem:
- Bigger trouble developing in Japan, BOJ minions staring to think they might get away with another rate hike:
- Japan's factory activity dips for 4th straight month, PMI shows
- BOJ may offer less dovish signs as US recession fears ease, rates on hold
- Bigger trouble developing in Eurozone, ECB minions too early to consider cutting rates faster:
- Euro zone business activity stuck in a rut, survey shows
- ECB does not need to contemplate below-neutral rates now, Latvia c.bank chief says
- Tesla helps S&P snap three-day losing streak, boosts Nasdaq; Dow ends in the red
- Friday, 25 October 2024
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- Signs and portents for the U.S. economy:
- BOJ minions get old problem:
- ECB minions expected to deliver another Eurozone interest rate cut, told to not stand in way of banks looking to avoid failures through mergers:
- ECB probably to cut rates by 25 basis points in Dec, Bloomberg News reports
- Euro zone governments should not interfere with bank consolidation, bank execs say
- Nasdaq pulls back after new record, ends higher; S&P snaps six-week win streak
The CME Group's FedWatch Tool anticipates a 0.25% rate cut on 7 November 2024 with additional 0.25% cuts at 6-to-12-week intervals through 17 September 2025. The CME FedWatch tool sees the Federal Funds Rate bottoming at a target range of 3.25-3.50% at that time.
The Atlanta Fed's GDPNow tool's projection of the real GDP growth rate for the current quarter of 2024-Q3 ticked up to +3.4% from the previous week's forecast of +3.3% growth.
Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a bear wearing a Halloween costume and scaring a Wall Street bull".
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