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Stocks, US yields fall as investors gauge economic sturdiness – Reuters

NEW YORK, Dec 5 (Reuters) – Global stock markets were forecast to fall for the second straight year on Tuesday, with U.S. Treasuries on track to decline for the second consecutive year, as investors try to gauge the policy direction of major central banks and the pace of slowing economic growth. Yields have fallen.

Weak economic data and recent comments from Federal Reserve officials, including Chairman Jerome Powell, have raised expectations that the U.S. central bank will end its rate hike cycle and begin cutting rates as early as March. ing.

Additionally, expectations are rising that the European Central Bank (ECB) may cut interest rates in the first quarter of 2024.

According to CME, about 64% expect the U.S. to cut interest rates by at least 25 basis points (bps) in March. fedwatch tool, up from about 35% a week ago. According to LSEG data, the market has priced in a 74% chance that the ECB will cut interest rates in March.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 78.42 points (0.22%) to 36,125.57, the S&P 500 (.SPX) fell 1.25 points (0.03%) to 4,568.49, and the Nasdaq Composite Index (.SPX) fell 1.25 points (0.03%) to 4,568.49. .IXIC) rose. 14,223.19 for 37.69 points (0.27%).

The Fed’s next policy meeting will be held on December 12-13.

Investors will get their first look at a series of data on the labor market this week in the Job Openings and Turnover Survey (JOLTS) report, culminating in Friday’s release of government pay statistics, which will have a big impact. will give. Market views on the Federal Reserve’s policy actions.

The number of U.S. job openings fell in October to its lowest level since early 2021, showing the labor market is easing as rising interest rates cool demand in the economy.

Reuters Graphics Reuters Graphics

“The numbers are better than expected and mean the job market is weak, but it doesn’t mean the Fed will need to cut rates or we’re on the brink of a recession,” said Paul Nolte, senior wealth advisor and market strategist at Murphy. It’s not that I’m weak enough to do that.” & Silvestre.

“And it’s certainly not strong enough to say the Fed needs to raise rates.”

Other data showed the U.S. services sector gained momentum in November as business activity increased, although new orders were flat and a measure of input inflation declined.

U.S. Treasury yields fell, with the benchmark 10-year Treasury note at 4.163%, its lowest level since September 1, and last down 11 basis points to 4.174%.

The yield on the two-year Treasury note, which typically moves in conjunction with interest rate expectations, fell 6 basis points to 4.593% on the day.

European stocks closed higher, with Germany’s DAX (.GDAXI) at 0.8 along with the STOXX600 (.STOXX), supported by big gains in Allianz (ALVG.DE) and Daimler Truck Holding (DTGGe.DE). % and closed at a new record. ) index rose 0.4%. The MSCI World Stock Index (.MIWD00000PUS) fell 0.23%.

ECB board member Isabel Schnabel, seen as the most influential voice in the conservative camp of policymakers, told Reuters that inflation had fallen “noticeably” and that policymakers would keep interest rates on hold. The ECB said it could take further interest rate hikes off the table, given that it should not be induced to do so. Until mid-2024.

The dollar index rose 0.38% to 104.01, while the euro fell 0.48% to $1.0784.

In commodity trading, US crude oil recently fell 0.59% to $72.61 per barrel, but the dollar strengthened after Russia announced that OPEC+ was prepared to further expand its first production cuts. Brent crude oil fell 0.74% to $77.45 in choppy trading as demand concerns offset supply concerns. quarter of next year.

Reporting by Chuck Mikolajczak.Additional reporting by Karen Brettell in New York, Amruta Khandekar and Shristi Achar A in Bangalore Editing by Mark Potter and Margherita Choi

Our standards: Thomson Reuters Trust Principles.

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