digitallop.blogg.se - What is the dow jones doing today

What is the dow jones doing today movie#
What is the dow jones doing today driver#
What is the dow jones doing today full#

A cooler-than-expected CPI could support the argument that the inflation peak is behind us, while an upside surprise could invite more rate hikes. consumer price index (CPI) is expected to ease to 8.1% from 8.3% prior 2.

While last week's labor-market trends were important, it is the September inflation reading released on Thursday that will likely confirm or derail the positive start to the quarter.

The graph shows the wide gap between job openings and the number of unemployed, driving wages higher. For now, companies are slowing the pace of hiring before cutting jobs, therefore keeping the unemployment rate low. The gap between the number of jobs and the number of unemployed remains high from a historical perspective, but it is starting to narrow.

Last week's data included the number of job openings, which decreased 10.0% in August, the most since April 2020, and the fourth decline in the past five months 1.

Historically, unemployment tends to rise more than a year after the Fed's first rate hikes, which highlights the long lags between the Fed actions and the time it takes to filter through the economy 1.

Yet, labor-market conditions are likely to weaken over the coming months as the economy slows. economy remains too hot for the Fed to achieve its 2% inflation target. The takeaway is that last month's jobs data are strong enough to keep the Fed on track to hike rates by 0.75% next month.On the wage front, hourly earnings were up 5% from a year ago, cooling slightly from the prior month, but still well above the pre-pandemic norm 1. September’s job growth marks a gradual slowdown from the August 315,000 gain, and the lowest monthly increase since April 2021. economy added 263,000 jobs last month, about in line with expectations, while the unemployment rate dropped to 3.5%, matching a five-decade low. Tight labor market keeps pressure on the Fed, but there are signs of loosening With expectations for the terminal rate moving from 3.2% up to around 4.6% in recent weeks.

The graph shows the evolution of market expectations for the Fed's terminal rate over the past three months. In our view, there is some room for the Fed to soften its tone, as the incoming data will allow the bank to do so down the road. Policy rates are expected to peak at 4.6% sometime next year from 4% 1. The difference now is that the goalpost has moved further up after last month's FOMC meeting. And Friday's labor-market strength once again dashed hopes for a Fed pivot.

What is the dow jones doing today movie#

But haven't we seen this movie before? - The market expecting the Fed to back off and the Fed not blinking? That's how the midsummer rally quickly fizzled after Fed officials reaffirmed the bank's determination to tame inflation.

Together with the Bank of England's (BoE) intervention pledging unlimited purchases of long-dated bonds to calm markets, it raised hopes that Fed officials might become more sensitive to signs of financial stress from the sharp tightening of financial conditions. The catalyst was a surprise move by Australia's central bank to slow its pace of rate hikes, citing the deteriorating global outlook.

On the flip side, a brief easing in yields helped lift equities from the lows.

What is the dow jones doing today full#

This inverse relationship was on full display at the end of last quarter, with stocks falling below the June lows as the 10-year Treasury yields surged briefly to 4%, the highest in more than a decade 1.

What is the dow jones doing today driver#

Swings in interest-rate expectations and bond yields continue to be a major driver of valuations and stock performance this year.

Renewed hopes for a Fed pivot premature for now, but slowdown is on the horizon The graph shows the decline in equities over the past three quarters, largely driven by the sharp rise in bond yields.