Stocks were mixed on Friday, with the Dow Jones Industrial Average retreating slightly, even as the prospect of an earlier, larger interest rate cut continued to energize Wall Street.
The Dow Jones Industrial Average (^DJI) fell 0.2%, or about 70 points, after the blue-chip index closed at a new all-time high on Thursday. The S&P 500 (^GSPC) was little changed, while the tech-heavy Nasdaq Composite Index (^IXIC) rose 0.2%.
Markets rejoiced this week with an unexpectedly dovish tone from the Fed, as it signaled further interest rate cuts in 2024 and acknowledged its anti-inflation campaign is gaining momentum. This fueled a record rally in U.S. stocks, with major indexes posting their sixth straight victory.
read more: Impact of the Fed’s interest rate hike suspension on bank accounts, CDs, loans, and credit cards
However, some observers have warned that the market could get ahead of itself, and the buoyant mood could start to fade. New York Fed President Williams said in an interview on CNBC on Friday that talk of rate cuts is “premature.” And in contrast to the Fed’s recent signals, European central banks tempered expectations for policy easing.
Meanwhile, about $5 trillion in U.S. stock options expire on Friday, 80% of which are tied to the S&P 500. Some analysts believe this expiry is the largest in at least two decades and could prevent any pullback.
Elsewhere, oil prices rose, on track for their first weekly gain since October, helped by the Fed’s weaker dollar. West Texas Intermediate (CL=F) futures are trading near $72 a barrel, while Brent crude oil futures (BZ=F) are trading near $72 a barrel, after rising more than 4% in the past two sessions. = It remained at around $77.
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Fed’s John Williams says rate cut talks are ‘premature’
New York Fed President Williams said Friday that the central bank is not discussing rate cuts, even though markets are moving on optimism that the central bank’s tightening campaign is nearing an end.
“We’re not really talking about rate cuts right now,” he told a news conference. Interview on CNBC’s “Squawk Box.”He said officials are instead focused on what Powell has said is the main goal for now: setting monetary policy to bring inflation down to 2%.
Wall Street stepped on the gas after Powell’s comments on Wednesday, interpreting the central bank’s latest outlook as leading to a deeper rate cut than previously expected. This fueled a record rally in U.S. stocks, with major indexes posting their sixth straight victory.
But optimism is already beginning to fade as Mr. Williams and other market watchers put the brakes on the euphoric mood.
Williams said talk of rate cuts is “premature” for now.
Manhattan rents fall for the first time in more than two years
Tenants in Manhattan may be increasingly taking control of their negotiations with landlords.
Median market rents fell to $4,000 in November, down 4.6% from October and 2.3% from a year earlier, according to a report released this week by brokerage firm Douglas Elliman and real estate appraiser Miller Samuel. . This is the first time in 27 months that the median monthly rent has decreased compared to the same month last year.
New lease contracts increased 9.7% year-on-year, but were down nearly 29% from October. Meanwhile, the vacancy rate in November was 2.9%, up from 2.4% a year ago and 2.8% in October. The Manhattan market is one of the largest rental markets in the country and is attracting national attention because it reflects the rental demand of wealthy people. . The pandemic caused an exodus that upended normal rental patterns, but New York expatriates returned in droves in 2022, spurring bidding wars and pushing prices to record highs.
National rental market It’s getting coldPart of the reason is because inventory has increased significantly, forcing landlords to deal with increased vacancies and reducing their ability to raise rents. Seasonality may also be a factor, as demand is lower during colder months.
Stock prices are mixed, but plans for a winning week
Stocks opened on either side of the flatline on Friday as investors caught their breath after initially feeling optimistic on hopes of a deep and early rate cut next year.
The Dow Jones Industrial Average (^DJI) fell 0.2%, or about 75 points, after the blue-chip index closed at a new all-time high on Thursday. The S&P 500 (^GSPC) also fell 0.2%, while the tech-heavy Nasdaq Composite Index (^IXIC) rose 0.2%.
Manufacturing emphasizes sparse schedules
Preliminary manufacturing data for December highlights a relatively quiet economic and business calendar on Friday.
S&P Global’s initial overview of manufacturing and services sector activity released Friday morning shows manufacturing sector activity will continue to contract this month, while services will expand at a slower pace, economists said. I predict that.
On the corporate side, Darden Restaurants (DRI)’s performance will be a long-term highlight to watch.
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