Summary:
Wall Street, Europe shares dip after Fed Chair Powell adjusts expectations. A strong job report makes six expected cuts unlikely.
Shares on Wall Street and in Europe fell on Monday after Fed Chair Jerome Powell re-anchoring expectations. The Fed meeting and a strong jobs report make six cuts that had been priced in highly unlikely.
Powell said in an interview on Sunday that almost all the FOMC member think a policy pivot will occur over the course of 2024. He expects inflation to keep falling in the first half of this year.
Non-manufacturing PMI in the US increased to 53.4 last month from 50.5 in December according to the ISM. A measure of new orders received by services businesses rose to 55.0 from 52.8.
Some of Wall Street’s biggest optimists become cautious. A higher number of companies' Q4 results missed analyst expectations than historically, said a Goldman Sachs research note on Monday.
Deutsche Bank AG data showing that aggregate equity positioning among rules-based and discretionary funds is in the top quarter of observations going back to 2010 out of FOMO.
Magnificent Seven companies carry a 33% premium to the index in terms of forward price-to-earnings, data compiled by Bloomberg show. Nvidia hit another record high overnight om AI prospects.
The S&P 500 sits comfortably above the ascending trend line despite some recent correction triggered by profit-taking. It will likely face a barrier at 5,000 overhead.
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