Antradienis, 21 gegužės, 2024
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Wall Street Insider: The Fed’s Next Move Will Make or Break These Stocks, Currencies, and Commodities

Wall Street is on a roll, with the S&P 500 and Nasdaq hitting new highs for the sixth week in a row. The Dow Jones also joined the party, adding 156 points on Monday. But the real action is yet to come, as the Federal Reserve prepares to announce its interest rate decision and the latest inflation data is released later this week. Will the Fed surprise the market with a rate cut? Or will inflation spoil the party? Here are the stocks, currencies, and commodities that you need to watch.

Market Movers

Some stocks are already making big moves ahead of the Fed’s announcement. Macy’s soared by 19.4% after a group of investors offered to buy the struggling retailer for $5.8 billion. Cigna jumped 16.6% as the health insurer scrapped its plans to buy Humana and instead launched a $10 billion share buyback program. Broadcom surged by 9% after Citi upgraded the chipmaker to a buy rating. And more than 50 S&P 500 companies reached new 52-week highs.

Cigna price soars
Cigna price

Inflation Trends

Inflation is the key factor that could sway the Fed’s decision. The latest data shows that US consumers expect inflation to ease to 3.4% in the next year, the lowest level since April 2021. This is good news for the Fed, as it suggests that inflationary pressures are moderating. However, inflation expectations are still above the Fed’s target of 2%, and some categories, such as food and medical care, remain elevated.

Interest Rates and Economic Indicators

The market is pricing in a low probability of a rate cut by the Fed, as the US economy continues to show strength. The US added 200K jobs in November, beating forecasts, and the unemployment rate dropped to 3.7%. The yield on the 10-year US Treasury note stayed near 4.25%, reflecting the market’s confidence in the US growth outlook.

Currency and Forex Market

The dollar index climbed to 104.2, a three-week high, as investors anticipated the Fed’s policy statement and the inflation data. The USD gained the most against the JPY, as the Bank of Japan signaled that it was not ready to raise interest rates anytime soon. The dollar’s strength is supported by the robust US labor market and the low inflation expectations.

US Dollar index
US Dollar index

Cryptocurrency and Commodities

Bitcoin and Ether fell, with Ether dropping by 8.45% and Bitcoin losing 7.27%. The cryptocurrencies were under pressure from the strong dollar and the regulatory uncertainty. Gold, Copper, and Silver also declined, as the dollar’s strength and the low inflation expectations reduced the demand for the safe-haven and industrial metals.

Bitcoin price down
Bitcoin price

Oil Markets

Brent crude futures slid below $76 per barrel, extending their downtrend for the seventh week in a row. The oil market was weighed down by the weak demand outlook and the high supply levels. The US, China, and Europe all reported signs of slowing economic activity, while the OPEC+ group maintained its production quotas. The only positive factor for the oil market was the US government’s plan to buy 3 million barrels of crude oil for its Strategic Petroleum Reserve, which provided some support for the prices.

Conclusion

Wall Street is in a bullish mood, but the Fed’s next move could change everything. Investors are eagerly waiting for the Fed’s interest rate decision and the inflation data, which could have a major impact on the market’s direction. The stocks, currencies, and commodities that we have highlighted are the ones that you need to watch closely, as they could offer you the best opportunities to profit from the Fed’s next move.

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