Weeks of speculation and nervous trade on Wall Street are set to reach an apex this week with a US Federal Reserve meeting expected to yield a new economic stimulus plan and key elections.
Stocks have been treading water in recent days, despite a deluge of generally positive corporate earning reports, as traders took positions ahead of the Fed action and key congressional and local elections, whose anticipated outcomes have been priced into the markets.
For the week, the Dow Jones Industrial Average was down 0.13 percent to 11,118.49 points.
The broader S&P 500 index rose a slight 0.02 percent to 1,183.26 points, while the technology-rich NASDAQ composite index rose 1.13 percent to 2,507.41 points.
Wall Street stocks, however, closed the month with solid gains: The Dow rose 2.61 percent, the S&P index advanced 3.37 percent and the NASDAQ index surged 5.51 percent this month.
“What we’ve seen is really a sideways movement in the markets for the last week to 10 trading days,” said David Levy, portfolio manager at Kenjol Capital Management.
This week is likely to see cautious trading before Wednesday’s expected Fed announcement of another round of large-scale bond purchases and as a new flow of earnings from companies, including Pfizer and Kellog, comes in.
“If anything is certain it is that the markets don’t like uncertainty,” Levy said.
“We’ve seen very little movement because for some degree the expectations are already priced in but investors do not want to get ahead of themselves in case of a surprise,” he said.
The US mid-term elections on Tuesday are widely expected to see the Democrats take a thumping and lose their majority in the House of Representatives, but not in the Senate.
“If that occurs I would not expect too much volatility in prices, anything other than that can cause some ripple effect,” Gina Martin of Wells Fargo Securities said.
However, it will take weeks if not months to see whether the change will lead to a gridlock on Capitol Hill or allow the passage of reforms in key financial issues, such as the thorny topic of tax cuts.
On Wednesday investors will be focused on the policy-setting Federal Open Market Committee (FOMC), which is expected to announce the renewal of asset purchases in an effort to resuscitate the lagging economy, in what is known as quantitative easing.
The past week’s data, including a modest 2 percent rise in US economic output this quarter and a surprise drop in jobless claims, did little to shake confidence that stimulus is nearing.
“The FOMC meeting is most important, and it’s not a question of whether or not the quantitative easing is announced, it is really a question of what size it is going to be and under what timeline,” Jefferies analyst Craig Peckham said.
Earlier this week, stock indices plunged after the Wall Street Journal reported the Fed will purchase bonds worth “a few hundred billion dollars over several months,” dampening hopes for a more aggressive intervention.
“A lot of the market reaction to the Fed will be based on the number, but a big part of it will be based on the text that accompanies their action and their -reasoning,” Levy said.
Trade is likely to remain tense ahead of Friday’s monthly unemployment report. Analysts expect the unemployment rate will be unchanged at 9.6 percent for the third consecutive month this month.
“At some point we will have to see job growth for the economy to rebound. The consumer is so vital to our economy, specially as we head in to the holiday season, it is very important to see jobs growth,” Levy said.
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
RSS