Economy
Wells Fargo Strategist Doesn’t See Tech Rally Stalling Until Fed Turns Aggressive, Says Market Resembles Boom Of Year 2000
Wells Fargo’s head of equity strategy Chris Harvey reportedly said the rally in technology stocks will not stop until the Federal Reserve becomes more aggressive and breaks the economy. The market now resembles the tech boom of 1999 and 2000, which didn’t end until tighter monetary policy had impacted stocks, he told Bloomberg TV.”The number one issue is: tech is not going to roll over, the major theme isn’t going to roll over until you crack the economy. That’s what happened back in 1999, that’s likely what’s going to happen now,” Harvey said.Also Read: How To Invest In Startups”And I don’t think you can crack the economy until the Fed gets more aggressive. So we’ll have some wiggles, I think we’ll have a pullback in the market, we’ll have a pullback in big tech, but that overall theme is still in place and not until the economy breaks do we really think about that trend breaking,” he stated, according to the report.Federal Reserve Chair Jerome Powell acknowledged the hardship caused by high inflation and reiterated the Fed’s dedication to bring inflation down to the 2% goal, during his Wednesday testimony before the House Financial Services Committee. Investors and traders have begun weighing in the possibility of extended rate hikes, especially after U.K. inflation surprised on the upside, with CPI rising 8.7% from a year ago in May.Resilient Economy: Harvey pointed out that while the central bank has been aggressive in tackling inflation, the U.S. economy has been a lot less rate-sensitive than anticipated, and the probability of a recession has come down since the March banking crisis.”So really, you need some sort of shock to get us into a recession,” he said. “We need a lot more time. This is taking a lot longer than we expect,” Harvey said according to the report.Wells Fargo’s year-end target for the S&P 500 is 4,200, it said. The SPDR S&P 500 ETF Trust SPY closed 0.51% lower while the Invesco QQQ Trust Series 1 QQQ declined 1.36%, according to Benzinga Pro.Read Next: Jim Cramer Advises Investors Not To Get Greedy But Wait — ‘It’s Often The Hardest Thing To Do’
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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