Stocks, Fed face the challenge of a bullish jobs market
When
There was euphoric talk the central bank could cut rates three or four times in 2024. Some thought six times.
But those giddy days are no more. A March cut won't happen. A rate cut in May isn't in the offing, either.
Why not cut now? Because Fed officials insist they want REAL DATA showing that inflation is at or near 2% and will stay there. (Sustainable is the word they use.)
The jobs report will command attention
And now a discrete event looms this week that could give the Fed more time to wait.
Related: Fed Inflation gauge ticks higher in January, but headline pressures ease; Stocks jump
A hot report (defined as, say, 350,000 jobs added -- the number estimated for January) and little change in the unemployment rate from January's 3.7% in January will confirm the Fed won't do any rate cutting at its
And probably not at its
After that, who knows? June? Maybe. July possibly.
One economist, Apollo's
A giddy market still rolls on
So far, investors haven't cared. The merry stock-market rally that erupted at the end of October is still going strong. Stocks ended February higher for a fourth straight month.
The
The S&P 500, which finished at 5,137.08 on Friday (its first close above 5,100), has risen 16 weeks in the last 18 weeks. The performance is the best in 50 years, FactSet says.
More Economy:
Fed members just hat-tipped what's next for interest ratesRetail sales tumble clouds impact of inflation dataJobs report shocker: 353,000 hires crush forecasts, stokes inflation fears
Eight of the S&P 500's 11 sectors are higher this year, with the best performances from communications services and technology.
Analysts keep raising their year-end targets for the index:
The Nasdaq-100 Index, up 7.8% this year, has climbed nearly 30% from its October closing low.
Nvidia (NVDA) was up 29% for February.
Bitcoin shoots higher
Bitcoin jumped nearly 46% in February after a lackluster January and ended Friday at
One reason for the sharp gain is you now can invest in bitcoin via exchange-traded funds (ETFs) offered by a host of money managers.
A number of bitcoin players see the crypto currency hitting
The 2-year
How long will the rally last?
Still, the 10-year
No wonder that the
A construction worker works on roof trusses for a new home.Shutterstock
And there are still reports of layoffs in technology companies and there's persistent chatter from prominent people like
Oil and gasoline prices are rising (maybe because of normal season trends).
Given how this market is performing, a recession and a market pullback need a strong and specific trigger.
The political environment may offer one. So, too, could a widening of the Russia-Ukraine War or the Hamas-Israeli war or a Chinese attack on
A true wildcard: something bizarre out of
All the optimism about stocks notwithstanding, the jobs report is, in fact, the dominant report of the week. Until then, market reaction to others due before Friday will probably be muted. The reports include:
Factory orders and the ISM Non-manufacturing on Monday. Factory orders on Tuesday. The weekly
Related: S&P adds two hot stocks to its flagship S&P 500 index
There are some important earnings reports due in the week ahead, including
Tuesday:
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