The New York Stock Exchange (NYSE) television station will broadcast a speech by Federal Reserve Chairman Jerome Powell on Wednesday, December 18, 2024.
Michael Nagel | Bloomberg | 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 could force global banks to take action
The Federal Reserve said on Wednesday Expectations for a smaller rate cut in 2025 than previously expected sent markets into disarray and boosted the dollar’s strength. Global central banks insist their monetary policy is independent of the Federal Reserve, but such currency moves could force them to take action.
Markets fall, but Dow ends losing streak
Thursday, S&P 500 Index and Nasdaq Index decreased slightly, and Dow Jones Industrial Average It managed a slight gain and broke its losing streak. Pan-European Stoke 600 It fell 1.51%, its worst day since November 12.
Partial U.S. government shutdown?
A House Republican bill to fund the government for three months and suspend the debt ceiling for two years failed to pass Thursday night. Thirty-eight Republicans joined most Democrats in voting against the deal, which was backed by U.S. President-elect Donald Trump. Without a deal and legislation, a partial U.S. government shutdown will begin late Friday night.
Bank of England keeps interest rates unchanged
The Bank of England kept its key interest rate unchanged at 4.75% on Thursday, with headline inflation hitting an eight-month high of 2.6% in November. While the decision was in line with expectations, the MPC’s vote surprised markets. Three members of the committee voted to lower rates, two more than a Reuters poll predicted.
(PRO) Trade the markets amid volatility
this CBOE Volatility IndexThe gauge, often called Wall Street’s fear gauge because it measures the relative strength of 30-day price changes, jumped sharply on Thursday following the Fed meeting but has since calmed down. Despite these concerns, there are opportunities within the volatility – here’s how to trade the market during times like these.
bottom line
If we look at it objectively, there wasn’t much change in the major U.S. benchmarks during Thursday’s trading session.
The S&P 500 fell 0.09% and the Nasdaq fell 0.10%, but the Dow Jones Industrial Average rose 0.04%.
But seen against the backdrop of Wednesday’s market rout, the direction of these shifts also points to a narrative that’s driving market activity, albeit a weak one.
To rephrase Thursday’s stock market in these words: Stocks mostly continued to slide after the Fed released its forecasts, but the Dow Jones finally broke a ten-game losing streak.
It’s a mixed bag. Should investors continue to exercise caution due to the downward trend? Or should they view the Dow’s breakout as a light at the end of the tunnel?
As with everything in the market, there aren’t any clear answers. The only certainty is that data points, such as today’s US November Personal Consumption Expenditures Price Index, will move the market more forcefully than before.
“Whatever the reaction is, it’s likely to be more severe than it was before the Fed actually raised these expectations,” said Mike Dickson, head of research and quantitative strategy at Horizon Investments, referring to the coronavirus outbreak. The Fed predicts PCE will be above the 2% target.
In fact, Wall Street’s fear index surged 74% to 27.62 on Wednesday, the second-largest gain in its history. Although the Volatility Index (VIX) fell 12.8% on Thursday, it still closed above 20 – a sign of increasing panic in the market.
It’s a bit ironic, but volatility may be the only thing more certain right now.
—CNBC’s Sarah Min, Sean Conlin, Brian Evans and Pia Singh contributed to this report.
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