![]() ![]() The softer-than-expected key inflation indicator “points to a higher probability of a soft landing,” said Gina Bolvin, president of Bolvin Wealth Management, noting markets could ramp up higher on the good news. The annual rate of inflation is now at a negative 0.6%, the lowest rate seen since 2020, while core inflation has dropped to 4.1%. Bureau of Economic Analysis reported the personal consumption expenditures price index, a key inflation indicator, increased by 0.2% last month. “If wage growth or inflation surprise to the upside in the second half of 2023, the Fed could make one more rate hike before the end of this year.” “With core inflation on course to slow between now and then, the Fed will probably refrain from further rate hikes,” said Bill Adams, chief economist at Comerica Bank. economist at Oxford Economics, wrote in an investor’s note, adding that “the Fed is signaling that it will err on the side of doing too much to ensure that it kills inflation at the potential expense of the broader economy.”įor those hoping for a glimmer of easing later this year or in early 2024, Powell said there are no immediately plans to start cutting interest rates, adding that “there’s a lot of uncertainty between what happens with the next meeting cycle, let alone the next year.”Įxperts say it is possible the Fed may return to the well on interest rate hikes if inflation remains sticky, but they also note the September meeting will likely be another “skip” session for the central bank while it evaluates whether the current 3% inflation rate continues to dip down to its 2% target rate. “This is quite the pivot in a month,” Ryan Sweet, chief U.S. economy from a “modest” expansion to a “moderate” one in the latest forecast, and in the face of recent economic indicators. The Fed’s change in attitude comes despite its downgrade of the U.S. During a question-and-answer session with reporters after the announcement, Fed Chair Jerome Powell noted the “extraordinary resilience” of the economy and said his staffers “are no longer forecasting a recession.” What’s more, the central bank no longer thinks the United States will enter an economic downturn. The federal funds rate now sits at 5.25% to 5.5%, the highest it has been in more than two decades. The big news of the week, but hardly unexpected, was the decision by the Federal Reserve on Wednesday to increase interest rates by 25 basis points, likely their last of the year. So far, the three pillars have been doing just fine, according to economic data released this week: Inflation continues to come down, the possibility of a recession is receding, and interest rate hikes seem to be on the way out. “However, unless we get material damage to one of the three pillars of the rally … any pullback should be modest.” “Stocks can’t go up every single day, and a pullback at some point shouldn’t be a shock,” wrote Tom Essaye of the Sevens Report in a Friday morning investor’s note. Still, the week’s gains were sizeable, with the Dow picking up 231 points since last Friday’s closing bell, the S&P 500 increasing 46 points, and the Nasdaq composite netting 284 points. market indices, after the Dow Jones Transportation Average.MANHATTAN (CN) - The Dow Jones Industrial Average could have pulled off a historic feat this week, matching or even beating its all-time win streak record going back to the late 1800s, but markets pulled back on Thursday. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.įirst calculated on May 26, 1896, the index is the second-oldest among U.S. ![]() The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor, which is approximately 0.152 as of November 2021. ![]() Furthermore, the DJIA does not use a weighted arithmetic mean. It is price-weighted, unlike stock indices, which use market capitalization. The DJIA includes only 30 large companies. stock market compared to a broader market index such as the S&P 500. Many professionals consider it to be an inadequate representation of the overall U.S. The DJIA is one of the oldest and most commonly followed equity indexes. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. ![]()
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