Dow futures rose more than 100 points in response to expectations that the United States will release its Personal Consumption Expenditure (PCE) Price Index, which indicates that inflation has peaked.
As of 18:03 Thai time, Dow Jones futures were up 135 points, or 0.41%, to 33,343 points.
The US Department of Commerce is to release the PCE index today, with analysts expecting the PCE index to indicate that inflation has peaked.
Analysts surveyed expect the main PCE index, which includes food and energy, to rise 5.5% in November from a year earlier. down from 6.0% in October.
On a month-to-month basis, the main PCE index is expected to rise 0.1% in November from 0.3% in October.
In addition, the underlying PCE index, which excludes the food and energy sectors, is the Federal Reserve’s (Fed’s) key inflation gauge, which is expected to rise 4.7% year-on-year in November. down from 5.0% in October.
On a month-to-month basis, the core PCE index is expected to rise 0.2% in November, unchanged from October.
The PCE index is an inflation indicator that can detect changes in consumer behavior. and covers the prices of goods and services more broadly than data from the U.S. Department of Labor’s Consumer Price Index (CPI).
Trading on Wall Street has entered the end of the year. We are just a week away from closing 2022 amid expectations that market sentiment will continue to stagnate into the new year.
Analysts expect the US stock market to perform poorly this year. After three consecutive years of gains, it will mark the biggest year-on-year decline since 2008. The Dow is now down 4.5% since early December. The S&P 500 and Nasdaq fell 6.3% and 8.7%, respectively.
Wall Street will be closed on Monday, December 26 for Christmas. As a result, today marks the start of the “Santa Rally”, which typically lasts seven days, taking place on the last five days of the current year and the first two days of the new year.
However, many analysts agree that the “Santa Rally” may not take place on Wall Street this year. Amid concerns that the US Federal Reserve (Fed) moving forward to raise interest rates will drag the US economy into a recession.
“We haven’t seen any sign of Santa Claus coming this year. The market is full of bad news. And the Fed won’t take action until February next year. and even if the market recovers Ma will not fully compensate for last week’s negative,” said Louis Navellier, founder of Navellier & Associates.
Sylvia Jablonski, CEO and chief investment officer of Defiance ETFs, said the Fed’s tight monetary policy is hampering this year’s “Santa Rally.”
“The Fed is blocking the way for Santa’s sleigh,” Jablonski said.
Ms. Jablonski said Fed Chairman Jerome Powell’s statement sent a loud and clear signal. He has no intention of slowing down. Or deflect from the Fed’s interest rate hike.
“The Fed will hike interest rates higher and for longer. and monetary policy will be tighter than expected As the market will be under pressure for a longer time from Fed policy. Despite the temporary rebound in response to earlier CPI numbers, the Fed’s stance will expose the market to short-term volatility term,” Jablonski said.
Chris Larkin, an analyst at Morgan Stanley said “We are entering the end of the year. And investors have been waiting for the phenomenal “Santa Rally”, but now the market is steadily declining. Investors expect slowing inflation to prompt the Fed to slow rate hikes, which will support the market. But the Fed and Powell kept raising interest rates and signaling further hikes. which worries investors.
Ed Moya, senior market strategist at Oanda, said: “The Fed is tight on monetary policy. He raised interest rates to 4% within nine months, increasing the risk of a recession. while Mr. Powell signals further rate hikes.
The Federal Open Market Committee (FOMC) unanimously raised its short-term interest rate by 0.50% to a range of 4.25% to 4.50% at its meeting this month. which is the highest level in 15 years.
In their Interest Rate Expectations (Dot Plot), Fed officials expect to continue raising interest rates in 2023 and not cut them until 2024, when the Fed will hike interest rates to their highest level, 5 .1% next year, above market expectations. and will keep the interest rate at that level for a period of time to keep an eye on the impact of monetary policy tightening on the US economy
