Home » Business » Wall Street anticipates inflation data and rises, with the support of the rise in growth stocks

Wall Street anticipates inflation data and rises, with the support of the rise in growth stocks

Mohamed El-Erian: The market is starting to feel that the comfortable inflation reduction plan is more complicated

The main US stock indices rose at the beginning of trading on Wall Street, Monday, after a significant rise in growth stocks, while Meta Platforms shares jumped due to reports of new layoffs.
The Dow Jones Industrial Average rose 200 points, or 0.60%, the Standard & Poor’s 500 Index rose 23 points, or 0.56%, and the Nasdaq Composite Index rose 80 points, or 0.72%.
Microsoft and Salesforce led Dow Jones gains; It increased by 3.6% and 1.8%, respectively. The technology sector was the best performer in the S&P 500; It increased by more than 1%.
The moves came after Federal Reserve Chairman Jerome Powell said there was still a long way to go in fighting inflation. Powell also noted that interest rates could rise more than markets expect if inflation numbers do not subside, reflecting some of the market’s previous optimism that rate hikes will ease soon.
Investors will get more inflation data this week, Tuesday; The Consumer Price Index report for January will be released, which shows whether price increases have continued to slow amid the central bank’s interest rate hike.
“The market is beginning to feel that the very comfortable story of inflation reduction is more complicated than we would like it to be,” said Mohamed El-Erian, chief economic advisor at Allianz, in televised remarks on CNBC on Monday.

  • The 10-year Treasury yield rose

Treasurys were range-bound after a sell-off in US government debt on Friday, which sent the 10-year Treasury yield up 7 basis points. The dollar’s strength gauge stabilized after rising earlier.

Investors are re-evaluating how high US interest rates will rise this year; Where inflation and jobs data are likely to remain hot later this week. This has fueled bets that the Fed’s rate will peak at 5.2% in July, up from less than 5% a month earlier.

“We certainly continue to be very cautious about equities,” Nanette Hechler Faid-Herby, chief investment officer at Credit Suisse International Wealth Management, told Bloomberg TV.

She added, “We find at the moment that there is a disconnect in assessments against interest rates by the Federal Reserve – and also by other central banks – that will be for the rest of the year.”

Patrick Harker, President of the Federal Reserve Bank of Philadelphia, was the last central bank governor to unveil expectations for interest rates to rise above 5%, after a drumbeat of comments last week that included a prediction from Neil Kashkari, President of the Federal Reserve Bank of Minneapolis, that “ The level will reach 5.4%.”

(agencies)

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