A lot has happened since the Federal Reserve last met in late July. Worries over the state of the U.S. economy intensified, leading to a rout in the U.S. stock market. During the first three sessions in August, the S & P 500 posted three declines of more than 1%. That included a 3% plunge on Aug. 5. Expectations of a Fed rate cut next month have also grown. Fed funds futures show traders are pricing in a 100% chance of at least a quarter percentage point rate reduction, per the CME Group’s FedWatch tool. Since the early August turmoil, however, Wall Street has found its footing in a big way. .SPX 1M mountain SPX in past month The S & P 500 has posted a gain in eight of the past nine sessions. The benchmark is also nearly 8% above its August closing low, putting it less than 1.5% below a record high set in July. UBS Global Wealth Management CIO Mark Haefele thinks there’s reason to stay bullish on stocks going forward. “US data suggest a soft landing remains more likely than not,” he wrote. “While the August non-farm payrolls on 6 September will be more definitive, weekly jobless claims data has supported the view that the weakness in the July employment report was partly due to disruptions caused by Hurricane Beryl.” “Second-quarter earnings results were not quite as strong as recent quarters, and some notable misses on guidance may have contributed to volatility in early August. But in aggregate earnings were fine, and guidance has held up with revisions,” Haefele wrote. Those comments, and the recent market action, come as investors await the Fed’s release of its July meeting minutes. The central bank kept rates unchanged back then but highlighted progress on lowering inflation . Elsewhere on Wall Street this morning, Mizuho upgraded Corning to outperform from neutral. “We’re aware of no overall slowdown in the company’s business and growth programs,” the firm wrote . “We believe the stock correction was driven more by the market rotation rather than any slowdown in Corning’s sales, and the company’s growth program is relatively broad-based. Since optical glass fiber & related segment is leading the growth, we believe the September 19 meeting could be a catalyst that will once again highlight the company’s strength.”
Wall Street tries to keep momentum with Fed minutes looming
Aug 21, 2024
