![]() Rose after the microchip maker reported stronger-than-forecast sales and profit. ![]() There were a number of interesting post-earnings moves after results on Tuesday night, mostly to the downside. ADP reported that private-sector payrolls decelerated to 106,000 in January, though the report noted California was coping with record floods, and back-to-back storms delivered ice and snow to the central and eastern U.S., in the reference week. There’s a flurry of data releases before the Fed announcement, including the Institute for Supply Management manufacturing index and job openings. There are near universal expectations the Fed will lift rates by a quarter-point, so the question is how much further the central bank signals it’s ready to take interest rates. Eastern, followed by Chair Jerome Powell’s press conference at 2:30 p.m. The Federal Open Market Committee decision is at 2 p.m. Bad news for your breakfast: egg prices have been soaring, and now coffee futuresĪre up 12% over the previous five sessions.įor more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily. ![]() “And I guess the other thing is, in a weird way, like interest rates coming down, and people betting on the Fed to kind of back off, juices the housing market because you see homebuilding stocks Doesn’t that have a mechanical effect on corporate earnings for the multinationals that trade on the S&P 500 “How do you get an earnings recession if nominal growth is running at 5%? Has anyone mentioned about the dollar? Like, the dollar is off 10%. If Dutta is correct, that means the Fed will not pivot to rate cuts in the back half of the year, which the stock market is not likely to take well.Īll that said, Dutta is not a stock-market bear, owing to the corporate profit backdrop. I mean, I hate to say it like this, it just means the disinflation that you’re going to see this year is also transitory.” “If wage inflation is still running at four and a half, 5%, it’s going to be difficult. And if compensation growth is running, right now, let’s say it’s 5%, and productivity is 1%, one and a half, you’re basically talking about an inflation environment of three and a half percent-ish,” Dutta said.ĭutta, who got his start working with David Rosenberg at Merrill Lynch, later came back to the topic. “For whatever reason, the Fed views the labor markets as the conduit. ![]() ![]() Neil Dutta, head of economics at Renaissance Macro Research, was explaining to Barry Ritholtz of the Masters of Business podcast what that number means to the Fed. At the same time, though, the index is running 5.1% year-over-year. Take the final day of January, in which stocks surged on data showing the employment cost index decelerated to a 1% quarterly rate, which was below expectations and importantly below the 1.2% of the third quarter. It’s possible neither Burry nor Cramer is correct. “We have to prepare for the down days now because in a bull market, they’re buying opportunities,” the CNBC commentator added. “If we’re in a bull market, and I think we are, you have to prepare yourself,” said Cramer, whose penchant for mistimed comments has spawned a fund that is seeking Securities and Exchange Commission approval to bet against his views. On the other end of the spectrum, Jim Cramer says it looks like we’re in a bull market now. ![]()
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