Wall Street Today | Fed Officials Say Rates May Need to Go Higher to Tame Inflation
MACRO
Fed Officials Say Rates May Need to Go Higher to Tame Inflation
Two Federal Reserve officials said the central bank may have to raise interest rates further to tame price pressures that in some sectors aren't showing much sign of easing.
Separately, the Fed released a new report Friday that said tighter US credit conditions following bank failures in March may weigh on growth, and that the extent of additional policy tightening will depend on incoming data.
"The FOMC will determine meeting by meeting the extent of additional policy firming that may be appropriate to return inflation to 2% over time, based on the totality of incoming data and their implications for the outlook for economic activity and inflation," the Fed said in in its semi-annual report to Congress.
Goldman, Barclays Strategists Hit Jackpot With Bet That Fed Won't Cut Rates
A prescient tip from interest-rate strategists at Goldman Sachs Group Inc. and Barclays Plc has paid off for investors as traders scrap wagers on a policy pivot by the Federal Reserve.
Both banks had recommended trades based on the idea that the US bond market was overly optimistic that the Fed would cut its policy rate this year after a concerted hiking campaign to battle inflation.
Cash Coming Off Sidelines Spurs Hope Bull Run in Stocks Has Legs
Confidence in this year's US stock-market rebound continues to build, with money-market funds notching their first outflows in almost two months, while cash kept on the sidelines by institutional investors has dropped to the lowest point in over a year.
The amount parked at US money-market funds dropped by the most since mid-April, with total assets falling by $4.7 billion to $5.45 trillion for the week ended Wednesday, according to data from the Investment Company Institute. Funds had hit a record high of $5.45 trillion earlier in June, following weeks of large inflows fueled by a comeback in high yields after a decade of historically low borrowing costs.
SECTORS
Soaring Travel Stocks Risk Stalling as Pent-Up Demand Wanest
Airline, hotel and cruise stocks have jumped since late May as consumers rush to travel, but the outlook for later this year is murky and higher interest rates may take their toll on the shares.
The S&P Supercomposite Airlines Index and the S&P Composite 1500 Hotels, Resorts & Cruise Lines Index are both near highs last touched in mid-2022, rising steadily in recent weeks. $SkyWest (SKYW.US)$, $Hawaiian Holdings (HA.US)$, $Delta Air Lines (DAL.US)$, $Carnival (CCL.US)$, $Norwegian Cruise (NCLH.US)$ and $Royal Caribbean (RCL.US)$ have led the advances in both groups, with $Carnival (CCL.US)$ set to end this week at the top of the S&P 500.
Drilling Stocks Plunge on Bets for Oil Price Slump
Oil prices are sliding. Some investors are betting they haven't hit bottom.
Shares of the four largest onshore drilling companies have plunged by 32% on average this year, while the S&P 500 energy index is down just 8.2% and the broader S&P 500 is up 15%. The steep fall for drilling stocks comes after a wave of recent rig idlings, which investors fear could signal a coming drop in oil demand amid a slowing economy.
COMPANY
Intel Plans Semiconductor Plant in Poland
$Intel (INTC.US)$ plans to build a $4.6 billion semiconductor assembly and test facility in Poland, giving the country a coveted place in the chip giant's growing European production footprint and boosting Europe's efforts at becoming more self-sufficient in chip production.
Rivian Tries Selling Trucks Out of Its Factory Parking Lot
Electric-vehicle startup $Rivian Automotive (RIVN.US)$ is trying out an unusual tactic to sell off its excess truck inventory: It is inviting buyers to shop what is available on its factory parking lot.
Toyota Defies Skeptics as Stock Seals Best Week Since 2009
$Toyota Motor (TM.US)$ stock sealed its best week since 2009 on Friday, as the automaker laid out a robust plan for future all-electric vehicles and company scion Akio Toyoda became leader of the Japanese company's board.
Source: Bloomberg, Dow Jones, CNBC
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
Read more
Comment
Sign in to post a comment
Moomoo News Official Account
In 10 minutes it’s history. At four I’m a dinosaur!
39KFollowers
26Following
46KVisitors
Follow
nyseoption : Obviously rates need to go up and will.
104160451 : This is the consequences of Printing dollars in the thin air without any gold backing.
This resemble grasping for air desperately in the thin air. This phenomenon will be more and more frequent in the future till there is no air to breath and die. When a strategy had made a mistake, it's time to make a change, otherwise the way it's going is falling over a cliff and perish.