Inflation is Trending Toward Targets, but How Long Will it Take? | Wall Street Today
RECAP
U.S. stocks ended mixed on Wednesday as investors shrugged off a somewhat hotter-than-expected February inflation report and digested gains from the previous session that propelled the $S&P 500 Index(.SPX.US$ to its 17th record high of the year.
The $Dow Jones Industrial Average(.DJI.US$ was up 0.10%. The S&P 500 toggled between slight gains and losses to trade at 5,165. The $Nasdaq Composite Index(.IXIC.US$ fell 48 points, or 0.3%, to 16,177.
The S&P 500 struggled to extend its rally into record territory on Wednesday, as investors absorbed a stickier-than-forecast consumer-price-index report for February and continued to count on at least a 25-basis-point interest-rate cut by the Federal Reserve in June.
MACRO
Inflation is Trending Toward Targets: How Long Will it Take?
Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, said he is "directionally confident" that inflation is drifting back toward the Fed's 2% target but isn't certain when it will reach that target.
LeBas told MarketWatch via phone on Wednesday, "I don't think the last two months of [inflation] data have made any key changes in Federal Open Market Committee officials' opinions" on monetary policy.
Federal Reserve Chair Jerome Powell's testimony last week about rate cuts remaining on the table for 2024, as well as remarks from other Fed officials over the past month, suggest "a lot of consistency" among policymakers on when they will start lowering interest rates, LeBas said.
In the latest Summary of Economic Projections, released in December, the median estimate of FOMC members was for three cuts totaling 75 basis points by the end of 2024. The Fed's updated interest-rate projections are set to be released next Wednesday.
"Inflation may have ticked up in the U.S., but the glass-half-full mentality rules for now, as the underlying strength in the U.S. economy prompts celebration rather than caution," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
No major U.S. economic reports were released Wednesday. The central bank is in a quiet period ahead of its policy decision next week, so no Fed speakers were scheduled, either. Meanwhile, secular growth factors in mega-cap tech stocks and hopes that a hard economic landing has been avoided continued to underpin market sentiment this week.
SECTORS
TikTok Bill Passes House Vote, Influencers On Edge: Chinese-Owned App Used By 150M Americans
A bill that would force the sale of TikTok by its Chinese owners or face a ban in the U.S. has been passed by the House of Representatives and will now head to the Senate.
If passed by the Senate and signed by President Joe Biden, the bill would give TikTok's parent company ByteDance, five months to sell TikTok or have it removed from app stores across all formats, affecting around 150 million U.S. users.
There were 352 "yays" in favor of passing the bill, well in excess of the two-thirds majority (290 votes) needed to move the bill to the Senate.
COMPANIES
Tesla's Stock Extends Selloff as Wells Fargo Joins the Bear Camp
Shares of $Tesla(TSLA.US$ extended their selloff toward a 10-month low Wednesday, as a Wells Fargo analyst moved to a bearish stance on the stock. Despite seeming like a growth company, Tesla has seen near-flat performance in the E.U. and China over the last 12 months, while its U.S. business has been down since the second quarter, Wells Fargo's Colin Langan noted.
Getty Climbs With Earnings Coming Up and New Search Functions
$Getty Images(GETY.US$ climbed 11% Wednesday after the firm announced an AI search function that lets users search with language models instead of using exact keywords. The company is due to report earnings on March 14th
Shares of U.S. Steel Drop Following Report on Biden's Concern Over Sale to Japan's Nippon Steel
$United States Steel(X.US$ on Wednesday dropped after The Financial Times reported that President Joe Biden plans to express serious concern over $Nippon Steel(5401.JP$'s proposed $14.9 billion acquisition of the Pittsburgh-based company.
Dollar Tree Misses on Earnings, Plans to Close 600 Family Dollar Stores in 2024
Shares of $Dollar Tree(DLTR.US$ were suffering their worst selloff in nearly two years on Wednesday, after the discount retailer missed fiscal fourth-quarter profit expectations, provided a downbeat outlook, and said it planned to close 600 Family Dollar stores.
ZIM Integrated Shipping Services Stock Sinking After Quarterly Loss
$ZIM Integrated Shipping(ZIM.US$ reported a fourth-quarter fiscal 2023 sales decline of 44.9% Y/Y to $1.21 billion, missing the consensus of $1.28 billion. The Haifa, Israel-based company generated an EPS loss of $(1.23), beating the consensus of $(1.29).
Source: Bloomberg, Dow Jones, CNBC, Reuters
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brave NyanCat_5398 : Until shorts close their shorts we will continue to buy! We are sick and tired of blue collar investors 1%s ripping us off for decades on in!
affable Blobfish_403 : The economy is booming, the stock market is booming, and inflation is stagnant. At this time, interest rates should be raised to curb inflation; why should interest rates be cut? What should I do if interest rate cuts cause a huge backlash of inflation?!
Mr Durian : Should we be scared?
Bill A : Stocks hold better value than buying another coin of the day or buying the next edition of a designer bag.
rayGun : I think you mean "white collar" blue collar is a reference to physical laboring working class
Tbeanbean affable Blobfish_403: The economy is generally not good
StrykerAce affable Blobfish_403: Are you crazy? Inflation was so out of control that even though the market was reaching new highs, it still wasn’t keeping up with inflation. That means it’s underperforming!
MadGuineaPig Tbeanbean: I was going to say booming is the last word I'd have used. lol
MAXIMAS82 : what economy do you live in i want to go where its booming