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Stocks rebound as Chairman Powell increases Fed caution

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U.S. stocks soared on Wednesday, with tech stocks rebounding from a selloff as investors digested Federal Reserve Chairman Jerome Powell's position that interest rate cuts by the end of the year remain likely.

The tech-heavy Nasdaq Composite Index (^IXIC) rose about 0.8% on Tuesday as tech stocks led a broader sell-off. The S&P 500 (^GSPC) also rose 0.8%, and the Dow Jones Industrial Average (^DJI) rose 0.6%. Both indexes experienced declines of more than 1%.

Mr. Powell's subsequent testimony to Congress stoked bubble fears by hitting Apple (AAPL) and Tesla (TSLA), two of the leading companies in the Magnificent Seven, and boosted stock prices after two days of losses. It is possible to give

Investors will be listening closely to see if Powell departs from the repeated message from Fed policymakers that there is no rush to cut rates. Powell told lawmakers that a rate cut would likely be warranted “at some point” in 2024. Investors will likely seek further clarity on the issue as Mr. Powell takes questions from lawmakers over the next two days.

“If the economy progresses broadly as expected, it would be appropriate to begin tapering policy restraints at some point this year,” Powell told the House Financial Services Committee.

Among individual stocks, CrowdStrike (CRWD) stock continued its post-earnings rally, rising more than 12% after the cybersecurity company's outlook suggested healthy demand in the sector.

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  • New York Community Bank plunges amid reports of attempted capital increase

    New York Community Bank (NYCB) fell again on Wednesday and was suspended throughout trading.

    Yahoo Finance's David Hollerith reports:

    Shares of New York Community Bank plunge on reports it is looking to raise capital, a number of challenges the commercial real estate lender faces as it struggles to restore investor confidence. was highlighted.

    The company's stock price fell as much as 45% after the Wall Street Journal reported that NYCB had sent bankers to find investors willing to buy the company's stock. It has fallen more than 80% since January.

    NYCB stock first started falling on January 31, when the company surprised analysts by cutting its dividend and increasing its allowance for loan losses.

    Turmoil reignited last week with the departure of CEO Thomas Cangemi, weaknesses in internal controls and the revelation that fourth-quarter losses rose tenfold to $2.7 billion. It intensified.

    The Hicksville, N.Y.-based lender currently has three options, said Chris Marinak, an analyst with Janney Bank.

    Through a financial instrument known as credit risk transfer, you can sell assets, raise capital or share the risk of some assets with external investors.

  • All 11 sectors are green

    After falling on Tuesday, Wednesday's rally was led by tech stocks.

    On the day, the Information Technology (XLK) sector rose more than 1.3%, leading the way in the sector. Notably, all 11 sectors are in the green zone, with utilities (XLU) also up more than 1%.

    Source: Yahoo FinanceSource: Yahoo Finance

    Source: Yahoo Finance

  • Wednesday trend ticker

    Palantir (PLTR) stock rose nearly 9% Wednesday to top the Yahoo Finance trend ticker page. The company announced Wednesday that it has won a new $178 million U.S. Army contract for battlefield systems that use artificial intelligence.

    Shares of JD (JD) rose more than 16% following the company's latest quarterly report. JD.Com beat Wall Street's quarterly revenue expectations and announced plans for a $3 billion share buyback program.

    CrowdStrike (CRWD) stock rose about 12%, matching a more than 20% rise in after-hours trading Tuesday night. The cybersecurity company's earnings per share of $0.95 reflected 102% year-over-year growth and beat Wall Street expectations of $0.82.

    Foot Locker (Florida) stock fell nearly 30%. In its fourth-quarter earnings release, the company announced that the timeline for achieving its operating margin target of 8.5% to 9% has been delayed by two years to 2028.

  • Nordstrom is exciting

    Nordstrom (JWN) has been underperforming all morning, dropping 15% after another tough quarter.

    Most analysts on the street remain cautious after the results, and rightly so.

    Sales of the core Nordstrom brand slumped again. Rack's sales increased by double digits. Margins are under pressure. The conference call commentary was not impressive.

    JPMorgan analyst Matt Vos summed up the mood of the stock perfectly:

    “We are underweight JWN. In the current climate, JWN's core household income customers of $100,000+ (MSD-HSD% personal savings rate, debt service ratios at 40-year lows, and U.S. household ) could be “as good as it gets” for both. +$12 trillion in wealth creation in 2020) and pricing/promotional aspects (lean channel inventory/industry AUR growth) – JWN’s absolute and relative performance continues to be underwhelming and will continue to grow in 2023. Revenue levels are below 2019 and EBIT margins are below 2019. ”

  • Wage increase rate for people changing jobs for the first time since November 2022

    On Wednesday, the ADP Institute's monthly wage insights report showed that wage increases for people who changed jobs in February increased for the first time since November 2022.

    Nella Richardson, chief economist at ADP, told Yahoo Finance that this is noteworthy because wage increases for job-changers are “the most sensitive to current labor market activity.” Mr Richardson added that the figures show the significant wage increases seen during the pandemic are “not going to sleep quietly”.

    “[Wages] In fact, it shows that labor market tightness remains very prevalent,” Richardson said.

    But there were also other signs on Wednesday that could point to a slowdown in wage growth on the horizon, which many believe is a welcome sign for the fight against inflation. There is. Liz Young, Head of Investment Strategy at SoFi listed in X Retirees tend to be ahead of wage increases by about nine months. Therefore, the decline in the turnover rate seen in January's JOLTs report suggests a “further wage slowdown” in the future.

    Another update on wages will be released along with the February jobs report, which will be released Friday at 8:30 a.m. ET. Economists polled by Bloomberg predict that wage growth will be 4.3% in February, down from 4.5% in January.

  • Job openings reached lowest level since March 2021

    The number of job openings in January hit its lowest level since March 2021, providing further signs of a rebalancing of the labor market.

    New data from the Bureau of Labor Statistics released Wednesday shows there were 8.86 million job openings at the end of January, down slightly from 8.89 million job openings in December. Economists surveyed by Bloomberg had expected 8.85 million job openings in January.

    The report also showed that the turnover rate, which reflects worker confidence, fell to 2.1%. This was down from 2.2% last month and the lowest level since August 2020. Additionally, JOLTS reported that employment for the month was 5.7 million, down slightly from December's 5.8 million.

    The hiring rate in January was only 3.6%.

  • Stock prices soar as the market approaches

    U.S. stocks opened higher on Wednesday, with tech stocks rebounding from a sharp selloff as investors digested Federal Reserve Chairman Jerome Powell's position that interest rate cuts this year remain likely.

    The Nasdaq Composite Index (^IXIC) rose about 1% on Tuesday as tech stocks led a broader sell-off. The S&P 500 (^GSPC) rose more than 0.6% and the Dow Jones Industrial Average (^DJI) rose 0.5%. Both indexes experienced declines of more than 1%.

    Prepared testimony released Wednesday morning revealed that Mr. Powell plans to tell lawmakers that a rate cut is likely warranted “at some point” in 2024. Investors will be looking for further clarity on the issue from Mr. Powell as he takes questions from lawmakers over the next two days.

    “If the economy progresses broadly as expected, it would likely be appropriate to begin tapering policy restraints at some point this year,” Powell told the House Financial Services Committee.

  • Bring in Jerome Powell

    Set your level in case you haven't already.

    This year could end with no rate cuts, in contrast to the six rate cuts expected in early January. It's interesting to see the market still swinging as interest rate expectations rise. It's good to see investors embracing the positive economic data.

    You'll hear the Fed's Jerome Powell continue his recent Fedspeak drumbeat on interest rates in testimony to Congress today.

    For economists at Goldman Sachs, 2024 is shaping up to be the year of rate cuts everywhere.

    “Major DM [developed market] Goldman's chief economist said: “Central banks are expected to cut interest rates in at least three consecutive meetings starting in June, and will continue to do so in economies where growth remains below trend, such as the euro area and the UK, but not in the US. There will be a slowdown in countries where economic activity is solid, such as the Jan Hatzius.

    That begs the question. Is it time to switch from more expensive US stocks to European stocks?

    Goldman expects the pace of interest rate cuts to pick up in markets outside the United States.Goldman expects the pace of interest rate cuts to pick up in markets outside the United States.

    Goldman expects the pace of interest rate cuts to pick up in markets outside the United States. (Goldman Sachs)





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