Antradienis, 25 birželio, 2024
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US Stocks Hit New Highs as Fed Hints at Rate Cuts: The Full Story

US stocks hit record highs as Fed signals rate cuts US stocks soared to new records on Tuesday, boosted by mixed signals from the Federal Reserve. Investors expected the Fed to cut rates three times in 2024, but some officials suggested fewer cuts. The Nasdaq 100, S&P 500, and Dow Jones all reached new peaks. The housing market also showed signs of improvement, as housing starts jumped to a six-month high.

US Stock Market Highlights

The Nasdaq 100 gained 0.6%, closing at an all-time high. The S&P 500 rose 0.6%, setting a new record. The Dow Jones added 251 points, closing at a fresh peak. Housing starts surged 14.8% month-over-month, the highest since April 2022. Affirm shares skyrocketed 15.5% after expanding its partnership with Walmart. Meta Platforms, formerly Facebook, climbed 1.7%, reaching its highest level since September 2021. Tesla increased 2%, while FedEx dropped 0.7% ahead of its earnings report.

Walmart trading strategy
Walmart trading strategy

International Market Highlights

The UK’s FTSE 100 index advanced 0.3% to 7,638, extending its gains from the previous session. Investors watched the Bank of England’s (BoE) and the Fed’s policy outlooks for 2024. Gilt yields declined, helping rate-sensitive companies like Ocado Group, which soared over 5%. Flutter rose 3.5% after an upgrade from Peel Hunt, while Fresnillo jumped 3.9%. France’s CAC 40 index edged up 0.1% to 7,575, awaiting PCE inflation data for clues on the Fed’s policy stance.

Veterinary laboratory Virbac lifted its 2023 financial targets, boosting market confidence. Teleperformance and Eurofins Scientific were the best performers, gaining 3.3% and 2.6%, respectively, while Legrand fell 1.6% after a downgrade from UBS.

Virbac stock price
Virbac stock price

US Housing Market Data

Building permits in the US dropped 2.5% to an annual rate of 1.460 million in November 2023. Housing starts soared 14.8% month-over-month to an annual rate of 1.56 million, the highest in six months. The rise was driven by lower mortgage rates and low inventory, with single-family home starts hitting the highest level since April 2022.

Currency Market Highlights

The US dollar index slipped to 102.2 on Tuesday, as investors anticipated rate cuts by the Fed in 2024. Traders saw a 66% chance of the first rate cut happening as soon as March, despite some resistance from Fed officials. The European Central Bank (ECB) and the BoE opposed rate cut expectations. The British pound, Australian dollar, and New Zealand dollar strengthened against the weakening greenback.

US dollar index
US dollar index

Canadian Dollar Strength

The Canadian dollar broke past 1.335 per USD in December, reaching its highest level since early August. Persistent inflation in the Canadian economy supported hawkish views for the Bank of Canada’s monetary policy. Inflation stayed at 3.1% in November, beating expectations of a slowdown to 2.9%. A higher-than-expected trimmed-mean core rate of 3.5% backed the idea of a longer period of tight monetary policy and possible further rate hikes.

Conclusion

The Fed’s mixed statements created a dynamic market environment, with US stocks hitting new highs and the housing market showing signs of recovery. International markets reacted to central bank policy outlooks, with the UK and France experiencing varied performance.

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