On Friday (November 10th) in the US market, major stock indices rose on Friday as investors evaluated the hawkish comments of Federal Reserve Chairman Powell and looked forward to key economic data next week. On Friday (November 10th), major stock indices rose on Friday, and investors evaluated the hawkish comments of Federal Reserve Chairman Powell and looked forward to next week's key economic data to obtain more clues about the path of monetary policy.
As of press release, the Standard&Poor's 500 Index rose 0.86%, the Nasdaq Composite Index rose 1.29%, and the Dow Jones Industrial Average rose 0.54%.
Powell stated on Thursday that central bank officials "do not believe" that interest rates are still high enough to end the fight against inflation and will not hesitate to further tighten policies if needed.
Hawkish rhetoric has ended the longest consecutive upward trend in two years for the S&P 500 and Nasdaq indices, as the market expects the Federal Reserve to end its interest rate hike cycle after maintaining interest rates unchanged at its last meeting.
Greg Bassuk, CEO of AXS Investments, said, "Yesterday's comments indicate that the theme of 'long-term upward trend' is more likely to emerge. That's the downside On the positive side, investors see strong profits and a resilient economy. Therefore, everyone's attention is focused on any other economic data or comments from the Federal Reserve, which can provide better feedback on the future direction of the economy and markets
The yield of benchmark 10-year treasury bond and 30-year treasury bond fell by about 5 basis points. A day ago, Powell's comments caused the index to rise by more than 10 basis points. Yields were also boosted by a weak demand treasury bond auction on Thursday.
Nevertheless, the economy remains more resilient than expected, which has been helpful for the stock market since the beginning of the year, despite uncertainty about when the Federal Reserve will complete interest rate cuts, according to UBS.
David Lefkowitz, the head of UBS US stocks, wrote in a report on Friday: "The sustained high level of vacant positions and a robust private sector balance sheet support our view of a 'soft' landing in the economy. However, economic growth may slow down in the coming months, and further improvements in inflation may be more gradual
Wall Street also analyzed new consumer confidence data for November, which showed an increase in inflation expectations last month. The latest survey by the University of Michigan shows that the index is 60.4, a decrease of 5.3% from a month ago and lower than the Dow Jones forecast of 63.7.
The benchmark S&P 500 index fell 0.8% on Thursday, ending its longest consecutive upward trend since 2021. The Nasdaq Composite Index fell 0.9%, ending a 9-day streak of gains and the longest consecutive rise in two years.
Gold prices fell to a three-week low on Friday, and as of press release, spot gold fell nearly 1% to $1939.01 per ounce.
Earlier, several Federal Reserve officials warned against betting that the Fed would no longer raise interest rates. The weakening demand for safe haven gold has also pushed down gold prices, as the risk premium of the Israeli Hamas war priced by the market is much lower.
Tai Wong, an independent metal trader in New York, said, "Powell's comments were not as dovey as expected, which prevented further increases in gold prices
Atlanta Fed President Bostick stated in his comments on Friday that the central bank needs to do more on inflation. Bostek expects future expenditures and demand to slow down, but it will take a considerable amount of time.
This situation bodes ill for gold, as higher interest rates push up the opportunity cost of investing in gold, which has no yield.
This concept has limited the significant increase in gold prices this year, keeping gold prices far below the coveted $2000/ounce level. But so far in 2023, gold trading prices have still risen by about 8%.
Bart Melek, head of commodity strategy at Dao Ming Securities, said, "Gold prices may rise above $2100 in the second quarter of 2024, and the need for the Federal Reserve to start cutting interest rates will serve as a catalyst
More clues about the path of monetary policy. As of press release, the Standard&Poor's 500 Index rose 0.86%, the Nasdaq Composite Index rose 1.29%, and the Dow Jones Industrial Average rose 0.54%. Gold prices fell to a three-week low on Friday, and as of press release, spot gold fell nearly 1% to $1939.01 per ounce.
