Fed Cuts Rates, Election Surge Rolls on for Stocks
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Welcome to the show market update podcast, where each trading day we recap key market results and statistics. I am called to clear, and here's a summary of what happened today, thursday, november seventh. The federal reserve cut rates twenty five basis points today, and the market reacted with a collective yan.

Stocks and treasuries kept their gains following the early afternoon decision, building on wednesday's election related surge to new record highs amid leadership from communication services and text stocks. Today's rate rim was in line with analysts thinking and reduced the fed funds range to between four point five percent and four point seven five percent following a fifty basis point slice in september. The move came despite strong economic data in september that helped send yields on the ten year treasury note up around seventy points.

Policymakers cited continued progress on inflation and a labor market that's cooled from an overheated state. The fed has one I on inflation and the other on labor trends as a dials back, the dramatic rise and rates are delivered from early twenty twenty two to mid twenty twenty three when inflation touched forty year. Taking rates down too quickly might arrest progress on inflation, while moving too slowly could threaten labor health.

The fed is basically attempting to thread the needle. We're trying to follow a middle ground, said fed chairman d power in his post decision press conference. We're on a path to a more neutral stance that has not changed at all since september.

Power added that the economy remains solid and that inflation has eased significantly over the last two years but remains somewhat elevated. While apple declined to predict where reads go next and today's meeting didn't include projections material, he indicated no change in the general path toward looser policy. Despite strong recent economic data and bumpy inflation readings, he believes inflation remains on its way toward the feds two percent goal.

Two inflation reports next week and a jobs report early next month will guide policymakers thinking. And though people declined to discuss paci c economic proposals from president election mp, that was my shape thinking. Over the longer run, given the wide range of possible fiscal policy changes, the fed is likely to proceed cautiously, but IT still has more rate cuts cancelled in for the next year, said Cathy Jones to fixed income strategy to china.

We wouldn't be surprised by a pass in the rate cutting cycle over the next few months if economic girl continues to be solid. The market now builds in about a seventy percent chance of another twenty five basis point rate cut next month, little changed from odds at this time yesterday. As indicated by futures trading before the fed decision, major index is powered higher on election rated momentum as treasury yields decline following wednesday's fierce rise and volatility sank to september levels.

Stocks continue to see post election upside momentum sydney n. Peterson, director of derivative analysis at the swab center for financial research, stocks continue to push higher in spite of rising yields. Is there a level where equity markets begin to care? Here's where the major benchMarks ended. The S N P five hundred index rose forty four point zero six points, or zero point seven four percent, to five thousand nine hundred seventy three point one zero.

The dw jone's industrial average fell zero point five nine points, or zero point zero zero percent, to forty three thousand seven hundred twenty nine point three four, and the nazi composite gained two hundred and eighty five point nine nine points are one point five one percent to nine thousand two hundred sixty nine point four or six the ten year treasury note yelled fell in nine basis points to four point three four percent, with most of the drop coming long before the fed decision. The sea o volatility index of the vics continued its post election plunge to fifteen point two one. As for stocks on the move, semiconductor shares LED the tech sector to nearly two percent gains today, while strength and mega caps, meta platforms and alphabet drawing communication services general mega cap strength lifted the S M P five hundred ambas stack, but small caps fell despite the rate cut.

The following companies had stock Price moves driven by analyst ratings, quarterly earnings or other news under armour, Warner brothers, discovery and raw flow, all roads today, on positive reactions to their quarterly results. ARM holdings rally more than four percent following an earnings report from the chip architecture maker that easily surpassed expectations. Lift jumped almost twenty three percent after a solid earnings report that included a fifteen percent rise in growth.

Bookings above expectations on wall street guidance for the current quarter looked solid to shares of its competitor, uber fell one point six five percent on the news. Jp Morgan chase in golden sex both fell sharply and weight on the doll after a downgrade of jape Morgan chase from Robert w. Beard bank stocks spite yesterday on the transfer T T rate.

Technically, the near term picture looks over bot for the major indexes, which is unsurprising following this week surge swab, Peterson said. However, the yet a longer term trend remains bullish, he added. Earlier today, initial weekly jobless claims of two hundred and twenty one thousand nearly matched the briefing dcom consensus of two hundred and twenty two thousand.

Continuing claims of one point eight nine two million, however, reached three year highs, suggesting people getting laid off are having a harder time finding new jobs. This is common in an economy with slowing jobs growth. And last week, september job openings and labor turnover survey, the gets confirmed that openings have dropped significantly from earlier this year.

Pal noted that the ratio of jobs to workers has narrowed. The fed has to consider this type of bearing indication. At the same time, economic growth strengthens, putting IT in a tough position as IT tries to address its dual Mandate of lower employment and Price stability. The atlantic feds GDP now indicator projects fourth quarter growth domestic product or GDP growth at a solid two point five percent.

Market participants appeared to think the fed will get more cautious about further cuts than IT indicated in its last set of projections entering today's meeting, the implied fed funds rate for next october had risen to around three point eight five percent compared to three percent a month ago. Based on recent economic resilience and potential for higher inflation, we believe the terminal rate may be in the four percent area, said the job center for financial research. The terminal rate is the ultimate level.

Rates are expected to be at when the fed is done with its current cycle of cuts. The next set of head projections is due next month, and the september outlooks saw policymakers median rate projection for the end of twenty twenty six at two point nine percent, down from four point four percent at the end of this year, powl said. The feds not on any preset course, and its next move depends on digit between now and next month.

Consumer spending, he said, remains resilient and inflation expectations remain anchored wall streets. Inflation worries ticked up this week, thanks in part to proposals trumpet made on the campaign trail around terrorists. Other potential policy ramifications of trumps win include a lower corporate tax rate, terrorist deregulation and a brougher role for the executive branch in monetary policy decisions.

Making how much he can accomplish depends in part on who controls the house of representatives. If republicans lose control of the chAmber, IT could complicate some of trust plans. Before the fed decision, investors received preliminary third quarter productivity and unit labor costs data.

Productivity of two point two percent roughly matched the two point three percent consensus, but labor costs jumped at an annualized rate of one point nine percent last quarter versus a zero point five percent average timing. However, productivity gains and lower hours worked suggest orations aren't seeing margins hit by labor costs. In his comments, paul acknowledged growing productivity over the last five years that appears to be allowing wages to rise without an inflationary impacts.

Tomorrow, after the open brings preliminary november U. S. Consumer sentiment data from the university of michigan, the briefing in dcom consensus is seventy point six little changed from seventy point seven in october.

The reports inflation expectations often get a close look. Also tomorrow, any announcement of fiscal stimulus from china might get the markets attention as a budget meeting ends there. Earlier today, china's october export data helped powers stocks there to two percent gains. Exports soar twelve point seven percent year over year compared with the average trading economic estimate of five percent. IT was the best export pace since july two thousand twenty two.

As of today, trader see seventy percent chances rates will fall twenty five basis points at the conclusion of the federal roban market committee meeting december seventeenth to eighteen th, and a twenty nine percent chance of no move based on the C M E at watch tool. There is a one percent chance of a fifty basis print cut. Then this has been the swell market update podcast.

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