Wall Street opened in the red zone on Fed rate concerns
2022.12.06 08:53
Wall Street opened in the red zone on Fed rate concerns
Budrigannews.com – After a selloff on concerns that the Federal Reserve might continue with interest rate hikes for a longer period of time, U.S. stock indexes were scheduled for a restrained opening on Tuesday. Meanwhile, the focus shifted to the Georgia runoff election, which could decide the fate of the Senate.
On Monday, positive data from the services sector provided additional evidence of the strength of the U.S. economy despite a series of significant interest rate hikes, resulting in the closing of all three major indexes at their lowest levels in nearly a week.
According to Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey, “investors are struggling between the current picture, continued rising rates even if it is at a slower pace, and looking forward to a point where the rate increases trail off and end.”
“A lot of investors fear the recession… the concern is that profits begin to fall more significantly during the recession.”
Money market bets suggest that the U.S. central bank will raise rates by 50 basis points at its policy meeting on December 13-14. Rates are expected to reach a peak of 5.05 percent in May 2023, up from 4.92 percent on Monday before the PMI data.
This year, equities and bond markets have been impacted by concerns about a steeper increase in borrowing costs. As a result, the dollar has risen, and the widely followed portion of the Treasury yield curve has become deeply inverted—a sign of recession.
According to data from Refinitiv IBES, as of December 2, analysts anticipated that S&P 500 companies would report earnings that rose by 4.4% in the third quarter but fell by 0.6% in the fourth quarter.
We were down 31 points, or 0.09%, down 2 points, or 0.05%, and up 4.75 points, or 0.04%, at 8:07 a.m. ET.
In the mean time, a Tuesday spillover political race in Georgia between Equitable U.S. Congressperson Raphael Warnock and conservative previous football star Herschel Walker will decide if President Joe Biden’s party can extend its razor-slender larger part in the Senate.
A victory for Warnock would give his party 51 seats in the upper chamber and some control over committees and appointments to the judicial branch. Republicans would have a better chance of stopping Biden’s agenda if Walker won.
Stock markets have historically benefited from a divided government led by a Democrat in the White House because it allows for partisan standoffs on contentious policy changes like raising the federal debt limit.
GameStop Corp (NYSE:) is one of the individual stocks. after a layoffs report in the media, the stock increased 1.6% in premarket trading.
General Electric (NYSE:) Co acquired 1.5% after Oppenheimer overhauled the modern aggregate’s stock to “outflank”, while Imperial Caribbean (NYSE:) As J.P. Morgan assumed coverage with an “underweight” rating, Cruises Ltd. lost 2.9%.
