The S&P 500 on Friday closed higher, in a light trading day ahead of a long weekend, as investors assessed inflation data against rate hike and recession fears.
A US Department of Commerce report showed that US consumer spending barely rose last month, while inflation cooled further, but not enough to discourage the US Federal Reserve from driving interest rates to higher levels next year.
The personal consumption expenditures price index, the Fed’s preferred inflation gauge, rose 0.1 percent last month after climbing 0.4 percent in October.
Photo: AP
A benchmark survey showed that US consumers expect price pressures to moderate notably in the next year, with the one-year inflation outlook dropping to the lowest in 18 months this month.
Wall Street indices on Thursday sold off sharply after revised data indicated a resilient US economy, fueling worries that the Fed could keep hiking rates for longer and end up pushing the economy into a recession.
However, Friday’s data and that it came roughly in line with expectations, eased some of those concerns for now, said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago, Illinois.
“This is a clear indication that this is a bad news is good news kind of market. The market wants the Fed to feel what they’re doing has been enough,” Cruz said.
“It is on edge over what the path for Fed policy is going to be for next year as that’s going to drive the economy and corporate earnings,” he said.
Investors have been jittery since last week as the Fed indicated that it remains stubbornly committed to achieving the 2 percent inflation goal and projected rate hikes to higher than 5 percent next year, a level not seen since 2007.
Joe Quinlan, head of CIO market strategy at Merrill and Bank of America Private Bank also called the Fed hawkishness “the big cloud on the horizon.”
“Today is more of a muted response to good data, but still it’s not all clear, mission accomplished,” he said, adding that analyst earnings estimates for next year are likely too high.
The Dow Jones Industrial Average rose 176.44 points, or 0.53 percent, to 33,203.93, while the S&P 500 gained 22.43 points, or 0.59 percent, to 3,844.82. The NASDAQ Composite added 21.74 points, or 0.21 percent, to 10,497.86.
The S&P and NASDAQ lost ground for the third week in a row, with the benchmark index falling 0.2 percent compared with a weekly decline of 1.94 percent for NASDAQ. The Dow gained 0.86 percent for its first weekly increase out of three.
Cruz said that thin trading volume might have created more exaggerated moves on Thursday and Friday, with volume dropping sharply on Friday as participants likely took time off ahead of the long weekend.
US markets are to be closed tomorrow, the day after the Christmas holiday.
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
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
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
RSS