Stock Markets
Powell green lights September rate cut
(Reuters) – Federal Reserve Chair Jerome Powell said on Friday “the time has come” for the U.S. central bank to cut interest rates as rising risks to the job market left no room for further weakness and inflation was in reach of the Fed’s 2% target, offering an explicit endorsement of an imminent policy easing.
“The upside risks to inflation have diminished. And the downside risks to employment have increased,” Powell said in a highly anticipated speech to the Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming. “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
STOCKS: The extended a gain to 0.92%
BONDS: The yield on benchmark U.S. 10-year notes fell and was at 3.812%The yield fell to 3.955%.
FOREX: The turned 0.394% lower
COMMENTS:
UTO SHINOHARA, MANAGING DIRECTOR AND SENIOR INVESTMENT STRATEGIST, MESIROW, CHICAGO
“Powell validated market expectations for a September rate cut while continuing to anchor on data dependency and economic outlook going forward.
“FX is a relative game, so the expectation for the Fed to join the other major banks soon in cutting rates is driving the dollar lower. Although the dollar is under pressure, the implied rate cut estimates have not moved significantly – the September meeting expectation is still around 30bps and total expected cuts by year-end only increased from around 95bps to 100bps right now.
“With inflation on a path towards target, the risks associated with employment take on a larger role going forward on the heels of the large negative payrolls revision, and the Fed reaction to employment prints will continue to move the dollar.”
STEVE ENGLANDER, HEAD OF GLOBAL FX RESEARCH AND MACRO STRATEGY STANDARD CHARTERED BANK, NEW YORK
“I think the markets’ reaction, which has been the dollar a bit weaker, bond yields a bit lower, is about right. It’s not like he said ‘Yeah, were going to do three 50s to begin the easing cycle.'”
“What he did was very much focus on the fact that the inflation target is in sight, that they are worried about the labor market, saying that the labor market doesn’t have to weaken any further. So, implicitly, it opens the door to 50s at some point without giving a timetable for it. We still don’t think 50 is going to be the first move, but it could come quickly if the labor market continues to weaken.”
DAVID DOYLE, HEAD OF ECONOMICS, MACQUARIE GROUP, TORONTO
“Powell has set the stage for rate cuts to commence in September. The extent of easing in coming months will depend on the incoming data tape with the labor market playing an important role in this.”
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA RESEARCH, ALLENTOWN, PA
“I felt a little surprised that he was pretty clear in his statement that inflation is coming down. They are confident that inflation will continue to come down and that employment has not been adversely affected.”
“He wants to let the markets know that the Fed is not behind the curve. By being as clear about the likelihood of a rate cut in September, he’s actually cutting rates a month early.”
“Powell was clear about the first rate cut, but not so much about the next ones, so I don’t think he’ll be exploding out of the blocks with a 50 basis point cut. But I think slow and steady is how the Fed wants to pace this early part of the easing.”
ELIAS HADDAD, SENIOR MARKETS STRATEGIST AT BROWN BROTHERS HARRIMAN, LONDON
“The reason why the message from Powell is on the dovish side is because he’s increasingly concerned about the U.S. labor market. You’ve got reasonably strong growth in the U.S. with the central bank that’s about to ease policy. It’s the perfect cocktail sauce for a rally in equities. This will carry on into next week or at least until we see the next employment numbers. You need a stronger-than-expected nonfarm payroll gains to reverse this.”
ANDRE BAKHOS, MANAGING MEMBER, INGENIUM ANALYTICS LLC, PLAINSBORO, NEW JERSEY.
“I now expect (a) 50 bps cut but the caveat would be if the job market numbers are very weak come early September. That could certainly sway a 50 bps into a 75 bps cut.”
“The longer term trends in stocks are rock solid and any weakness is an opportunity to add exposure. But again, in short term, we’re going to get that choppy, erratic, volatile moves because no one really knows what happens now that he has (Powell) shown his hand and said what everyone expected. We’re going to have to see how this play out.”
GLEN SMITH, CHIEF INVESTMENT OFFICER, GDS WEALTH MANAGEMENT, TEXAS
“Powell’s Jackson Hole comments all but assure a 25 basis point rate cut in September, as the Federal Reserve has been telegraphing for quite some time now. The September meeting is three weeks away and there are only a handful of jobs and inflation data points to be released until then and it’s unlikely that these next few data points will change the Fed’s plans to cut rates by 25 basis points next month.”
“While a September rate cut is essentially a done deal at this point, the more important question is whether this will be a one and done rate cut, or if it will be the beginning of a more substantial cutting cycle, and that will be determined by the economic data over the next two to three months. The market is pricing in multiple rate cuts over the next 12 months, although we remind investors that the market has a history of being too optimistic about rate cuts.”
“We have now seen more evidence than ever that a soft landing has been achieved. Since the post-Covid uptick in inflation, consumer prices are now closer than they have ever been to the Fed’s 2% target. While there has been a slowing of economic data, that’s very different from a recession.”
KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO
“He noted growing concern about the job market and that’s really helping to ratify market expectations for multiple cuts through the autumn months. I think the key sentence there is that they’ll ‘do everything we can to support a strong labor market as we make further progress toward price stability.’ So that to me does suggest that he’s acknowledging the growing concern among policymakers around the direction of labor markets.”
“He does not put a 50-basis point cut on the table for September, and I think that that is somewhat in line with what markets have been anticipating as well.”
WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY
“We’re seeing from the price action that markets are rejoicing. It’s finally getting the candy that it’s been anticipating from the Fed. In terms of rate cuts, the forward guidance has been somewhat mixed depending on who from the Fed has been talking. But obviously when you hear from the chair, he speaks for the entire committee. And now it’s unequivocally there, the guidance is there, that rates cuts are coming. Markets are rejoicing off that. Markets have been anticipating this candy and now it’s getting the candy. But just like a lot of candy, there’s this immediate sugar rush and then comes the reckoning that we still need to go through.”
PAUL CHRISTOPHER, HEAD OF GLOBAL STRATEGY, WELLS FARGO INVESTMENT INSTITUTE, ST. LOUIS, MISSOURI
“There’s no question they’re going to cut rates but the question is how much … It’s more dovish than what I would’ve expected because the labor market really isn’t at a level that approaches recession from the data we’ve seen. After all we heard Fed officials yesterday argue for gradual and methodical approaches.”
“Today you hear the Fed chair leading off with statements like not seeking or welcoming further cooling in labor market conditions.”
“It signals that they’re definitely going to cut rates. Can they still be gradual yes. It’s a positive message. It’s a clear message. Is it a signal to throw all your cash into the market? No. They’re still going to be gradual and the market may still be getting ahead of itself on how quickly the Fed will deliver.
Therefore we think there’ll be more volatility in this market going into the end of this year.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK
“Powell is on the dovish side, saying there’s ample room to respond to any risk we may face. I think that’s the key.”
“What he’s suggesting here is if the labor market continues to weaken, we’re looking at a 50-basis-point rate cut in September as opposed to 25.”
“’The time has come for policy to adjust,’ and ‘we do not seek or welcome further cooling in labor market conditions.’ That’s another key point and it tells me we’re looking at a 50 bp cut in September.“
“He seems that he’s responding to the big benchmark revision we had the other day.”
“He’s also saying that confidence has grown that inflation is on its way back down to 2%. This is a dovish Powell today, and we see markets responding accordingly.”
“I think we’ll have two cuts, a total 75 bp this year, especially if the labor report for august should indicate further weakness.”
MARC CHANDLER, CHIEF MARKET STRATEGIST, BANNOCKBURN GLOBAL FOREX, NEW YORK
“I think initially the market is really going to be dovish, taking interest rates down and taking the dollar down. I’m still not sure that this is going to stick. I think that I don’t really see him telling us anything that we didn’t really know.”
“He’s basically saying that the magnitude is going to be driven by the data, and as you look at what’s likely in the jobs data and the CPI before the Fed meets, and the general tone, I don’t see a strong sense of urgency or panic that a 50-basis point cut would seem to imply.”
KIM FORREST, CHIEF INVESTMENT OFFICER, BOKEH CAPITAL PARTNERS, PITTSBURGH
“It seems like while we’re walking through the economy’s history over the last couple of years, it seems we have come to a point where the Fed needs to be more accommodative and the markets are reacting to that.”
“Everything that (Powell) has ever told us is that it’s data driven. They are not going to immediately lower rates.”
“Especially on Bostic’s comments, and they all know what the script is and stick to it, he was fairly dovish especially when it came to what the real rate is. He said it is restrictive. These comments point to cuts beginning and the market is nodding it’s head in agreement.”
Investing.com — In a recent note, Bank of America outlined 14 key lessons from 2024 that investors should keep in mind as they head into 2025, warning that market momentum and stretched valuations could face headwinds in the year ahead.
While this year resembled the steady gains of 1996-97, rather than the bubble peaks of 1998-99, risks are mounting—from geopolitical tensions and rising debt to market fragility highlighted by the VIX.
BofA points to opportunities in Europe, China, and Japan but cautions that volatility, trade disputes, and macroeconomic uncertainty will shape the next leg of the market cycle.
Below are the 14 lessons that BofA highlighted.
1. 2024 was a strong year for markets, but it might only be the beginning.
2. The market’s performance in 2024 looked more like the steady gains of 1996-97 than the bubble peaks of 1998-99.
3. In a bubble environment, market leadership can persist for longer than investors can afford to stay underweight.
4. However, the combination of strong momentum and high valuations is already too stretched to avoid a potential bust.
5. The has shown that markets remain fragile, and a major shock may be overdue.
6. August 2024 suggests buying market dips and locking in volatility spikes; using smarter strategies like skewed delta positioning may be key for 2025.
7. Rising debt levels and persistent inflation mean bond vigilantes remain the most visible macroeconomic tail risk.
8. Market fragility, faster reactions, and elevated valuations suggest a repeat of the calm volatility seen in 2017 is unlikely.
9. A Trump election victory has reignited concerns around tariffs, with European companies favored by dollar strength potentially becoming the next trade targets.
10. European equities remain cheap and unloved—investors should be cautious about being caught short, as fewer crowded trades mean less volatility pain.
11. China’s outperformance over Japan in 2024 could continue if U.S. interest rates decline.
12. VIX options data indicates that positioning risks in the market have not gone away.
13. Eurozone bank dividends have outperformed the for much of the past year; investors may need to hedge against a different outcome in 2025.
14. The risk of sharp movements in the Japanese yen, driven by volatility, could cause instability for the in 2025.
Stock Markets
Class Action Lawsuit Reminder WOLF: Kessler Topaz Meltzer & Check, LLP Reminds Wolfspeed, Inc. (WOLF) Investors – A Securities Fraud Class Action Lawsuit Has Been Filed
RADNOR, PA. – (NewMediaWire) – December 21, 2024 – The law firm of Kessler Topaz Meltzer & Check, LLP (www.ktmc.com) informs investors that a securities class action lawsuit has been filed against Wolfspeed (NYSE:), Inc. (Wolfspeed) (NYSE: WOLF) on behalf of those who purchased or otherwise acquired Wolfspeed securities between August 16, 2023, and November 6, 2024, inclusive (the Class Period). The lead plaintiff deadline is January 17, 2025.
CONTACT KESSLER TOPAZ MELTZER & CHECK, LLP:
If you suffered Wolfspeed losses, you may CLICK HERE or go to: https://www.ktmc.com/new-cases/wolfspeed-inc?utm_source=PR&utm_medium=link&utm_campaign=wolf&mktm=r
You can also contact attorney Jonathan Naji, Esq. by calling (484) 270-1453 or by email at info@ktmc.com .
DEFENDANTS ALLEGED MISCONDUCT:
The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Wolfspeeds optimistic claims of potential growth of its Mohawk Valley fabrication facility and general demand for Wolfspeeds 200mm wafers in the electronic vehicle market fell short of reality; and (2) Wolfspeed had overstated demand for its key product and placed undue reliance on purported design wins while the Mohawk Valley facilitys growth had begun to taper before recognizing the $100 million revenue per quarter allegedly achievable with only 20% utilization of the fabrication, let alone the promised $2 billion revenue purportedly achievable by the facility.
Please CLICK HERE to view our video or copy and paste this link into your browser: https://youtu.be/zMLfnSRjg2Y
THE LEAD PLAINTIFF PROCESS:
Wolfspeed investors may, no later than January 17, 2025, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP encourages Wolfspeed investors who have suffered significant losses to contact the firm directly to acquire more information.
ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP:
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country and around the world. The firm has developed a global reputation for excellence and has recovered billions of dollars for victims of fraud and other corporate misconduct. All of our work is driven by a common goal: to protect investors, consumers, employees and others from fraud, abuse, misconduct and negligence by businesses and fiduciaries. The complaints in this action were not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com .
CONTACT:
Kessler Topaz Meltzer & Check, LLP
Jonathan Naji, Esq.
(484) 270-1453
280 King of Prussia Road
Radnor, PA 19087
info@ktmc.com
May be considered attorney advertising in certain jurisdictions. Past results do not guarantee future outcomes.
View the original release on www.newmediawire.com
Copyright 2024 JCN Newswire . All rights reserved.
By Savyata Mishra, Gursimran Mehar and Renee Hickman
(Reuters) -Some members of the Starbucks (NASDAQ:) workers’ union that represents more than 10,000 baristas walked off their jobs in multiple U.S. cities on Friday, citing unresolved issues over wages, staffing and schedules.
The five-day strike, which began on Friday and closed Starbucks cafes in Los Angeles, Chicago and Seattle, will expand to Columbus (WA:), Denver, and Pittsburgh through Saturday, the union said in a statement.
This is the latest in a series of labor actions that have picked up pace across service industries following a period when workers at manufacturers in the automotive, aerospace and rail industries won substantial concessions from employers.
At Starbucks, the Workers United union, which represents employees at 525 stores across the U.S., said late on Thursday that walkouts would escalate daily, and could reach “hundreds of stores” nationwide by Christmas Eve.
“It’s estimated that 10 stores out of 10,000 company-operated stores did not open today,” Starbucks said, adding that there was no significant impact to store operations on Friday.
Around 20 people joined a picket line at a Starbucks location on Chicago’s north side, buffeted by snow and wind, but cheering in response to the honking horns of passing cars.
A few confused customers tried to walk into the closed store before strikers began chanting, but union member Shep Searl said the reaction had been mostly positive.
Searl said 100% of the unionized workers at the Starbucks location in Chicago’s Edgewater neighborhood were participating in the strike, and according to the workers, they have been subject to numerous unfair labor practices including write-ups, “captive-audience” meetings and firings.
The union member said they made about $21 an hour and added, “that would have been a great wage in 2013”.
It is an inadequate wage, the baristas said, given inflation and the high cost of living in a large city, especially since they rarely get 40-hour work weeks.
WORKERS SNUB OFFER
Negotiations between the company and Workers United began in April, based on an established framework agreed upon in February, which could also help resolve numerous pending legal disputes.
The company said on Thursday it has held more than nine bargaining sessions with the union since April, and reached more than 30 agreements on “hundreds of topics”, including economic issues.
The Seattle-headquartered firm said it is ready to continue negotiations, claiming the union delegates prematurely ended the bargaining session this week.
The union, however, said in a Facebook (NASDAQ:) post on Friday that Starbucks had yet to present a serious economic proposal with less than two weeks remaining until the year-end contract deadline.
The workers’ group also snubbed an offer of no immediate wage hike and a guarantee of a 1.5% increase in future years.
“Workers United proposals call for an immediate increase in the minimum wage of hourly partners by 64%, and by 77% over the life of a three-year contract. This is not sustainable,” Starbucks said on Friday.
In response to Starbucks’ statement on the proposals, Michelle Eisen, a Starbucks barista and bargaining delegate, said, “Starbucks’ characterization of our proposals is misleading and they know it. We are ready to finalize a framework that includes new investments in baristas in the first year of contracts”.
Separately, the baristas’ union said on Friday that it filed a new labor practice charge against the coffee house, alleging Starbucks “refused to bargain and engaged in bad faith bargaining” over economic issues.
Hundreds of complaints have been filed with the National Labor Relations Board (NLRB), accusing Starbucks of unlawful labor practices such as firing union supporters and closing stores during labor campaigns. Starbucks has denied wrongdoing and said it respects the right of workers to choose whether to unionize.
WORKING ON A TURNAROUND
Last month, the NLRB said that Starbucks broke the law by telling workers at its flagship Seattle cafe that they would lose benefits if they joined a union.
“It’s (the strike) taking place during one of the busiest times of the year for Starbucks, which could magnify its impact while bringing unwanted public scrutiny into the company’s labor practices,” Emarketer analyst Rachel Wolff said.
The coffee chain is working on a turnaround under its newly appointed top boss, Brian Niccol, who aims to restore “coffee house culture” by overhauling cafes and simplifying its menu among other measures.
“Given how much Starbucks is already struggling to win over customers, it can ill afford any negative publicity – or impact to sales – that the strike could bring,” Wolff said.
The Starbucks workers’ strike comes in the same week as Amazon.com (NASDAQ:) workers at seven U.S. facilities walking off the job on Thursday, during the holiday shopping rush.
There were 33 work stoppages in 2023, the most since 2000, though far lower than in past decades, data from the U.S. Bureau of Labor Statistics showed.
Forex2 years agoForex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Unbiased review of Pocket Option broker
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China
- Forex2 years ago
The dollar is down again against major world currencies
