Daily Market Commentary

December 14, 2023

Bonds & Stocks
Wall Street extended its rally after dovish Federal Reserve signals unleashed a bullish pulse across global markets amid optimism the world’s largest economy will be able to avert a recession. Equities climbed around the world — with the S&P 500 moving closer to its all-time high — as the Fed pivoted toward reversing the steepest hikes in a generation after taming inflation without a major economic slowdown. Both retail sales and jobless claims on Thursday reinforced the soft-landing narrative. And Jerome Powell’s lack of against the dovish bets also helped renew the surge in Treasuries, with the 10-year yield below 4%.

Economy
After clashing in recent years, Wall Street traders and the Federal Reserve are – for once – broadly in sync: The great monetary pivot is near as central bankers engineer a once-unthinkable soft landing in the world’s largest economy. That’s the big-picture takeaway after the Fed gave its clearest signal yet that its historic policy tightening campaign is over by projecting more aggressive interest-rate cuts in 2024 – in the process igniting one of the biggest post-meeting rallies in recent memory.

World
The European Central Bank kept interest rates on hold for a second meeting with inflation tumbling, but said it will step up its exit from €1.7 trillion ($1.8 trillion) of pandemic-era stimulus. The deposit rate was left at a record 4% — as predicted by all 59 economists in a Bloomberg survey — with the ECB reiterating that this level will make a “substantial contribution” to returning consumer-price growth to its 2% goal.

The information represented herein was obtained from various sources, which we believe to be reliable. Neither the information presented nor opinions expressed constitutes an offer to buy or sell any security. And it is not intended to guide the investor on which securities to buy, or when to buy or sell.