Federal Reserve Chairman Jerome Powell speaks during a press conference following the November 6-7, 2024 Federal Open Market Committee meeting at the William McChesney Martin Jr. Federal Reserve Building in Washington, DC, November 7, 2024 .
Andrew Caballero-Reynolds | AFP | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Fed cuts rates by 25 basis points
On Thursday, the Fed Cut interest rates by 25 basis points, or a quarter of a percentage point, bringing the target range to 4.50%-4.75%. At a Fed news conference, Chairman Powell told reporters that he would not resign if Donald Trump asked him to and that Trump did not have the authority to fire or demote him.
The driving force behind the market
U.S. markets continued their gains on Thursday, driven by post-election momentum. Pan-European Stoke 600 The index rose 0.62%. Hong Kong Hang Seng Index After the island’s central bank and the Federal Reserve simultaneously cut interest rates by 25 basis points, the increase fell back to around 0.8%.
China expected to launch new fiscal stimulus measures
China is expected to announce a new fiscal stimulus package on Friday when China’s parliament wraps up a five-day session. Analysts believe that the scale of support may be higher than originally planned due to Trump’s threat to impose tariffs of up to 60% on Chinese imports.
Bad quarter for Nissan
Japanese car manufacturer Nissan It reported a net loss of 9.3 billion yen (about $62 million) in the fiscal second quarter on Thursday. Operating profit, which is a company’s profit before taxes and other expenses, fell nearly 85% from the same period last year. Nissan also lowered its full-year forecast. The stock price fell 10% at one point before recovering slightly.
(PRO) Bitcoin Could Hit $100,000
Bitcoin After Trump won the US election, its price soared to a peak price of over $76,000. Analysts believe that the cryptocurrency may climb further and reach the $100,000 milestone by the end of the year.
bottom line
During Wednesday’s post-election rally, Standard & Poor’s Statistically, the index rose 2.53%, the best post-election move in the index’s history Deutsche Bank’s Jim Reid, head of global economics and thematic research.
Some of that momentum carried over into Thursday. The S&P continued its gains, rising 0.74%. Technology stocks, e.g. apple, meta platform and NVIDIArose, help Nasdaq Index It rose 1.51% and closed above 19,000 points for the first time. this Dow Jones Industrial AverageHowever, it gradually disappeared. The 30-stock index traded near its flat line, dragged down by losses in financial stocks.
“The market is signaling that a Trump administration will be good for economic growth and risk assets, but the combination of faster growth and new tariffs will lead to inflation,” said Scott Helfstein, head of investment strategy at Global X ETFs.
If inflation returns, the Fed may continue to lower interest rates. Such concerns may dampen investor excitement about stocks for now.
Powell insisted at yesterday’s press conference that “the election will not have an impact on our policy decisions.” Still, the Fed will be affected by the next administration’s decisions.
“In principle, any government policy or policy enacted by Congress is likely to have economic impacts over time,” he said. “Projections of those economic impacts will be included in our economic models.”
Data comes from CME Group Fed Watch Tool Showing some caution is filtering into the market. According to the futures market, only 30.4% of traders believe the Fed will cut interest rates again in January. By comparison, 53% expect the Fed to keep rates steady. These percentages depend on the central bank cutting interest rates to 4.25%-4.50% in December.
Of course, these are all predictions, and we know how inaccurate polls and bets can be.
“In December, we’re going to have more data, and I think there’s going to be an employer report, two inflation reports and a lot of other data,” Powell said. The Fed prefers hard data. In the market, as in other aspects of our lives, this can be good advice.
—CNBC’s Jeff Cox, Lisa Kailai Han, Hakyung Kim, Jesse Pound and Alex Harring contributed to this report.
This story has been updated to clarify that 53% of traders expect the Fed to keep interest rates steady in January, according to the CME FedWatch tool.
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