Bonds & Stocks
Stocks took a breather after a rally that drove the market to its best week in 2024, with traders digesting some Fedspeak and awaiting fresh data for clues on the interest-rate outlook.Equities saw a mild pullback, driven by weakness in some of the technology names that have powered the bull run. Concern about a disconnect between earnings expectations and share prices have grown, with Morgan Stanley and JPMorgan Chase & Co. warning that it’s hard to justify the current lofty valuations if profit acceleration fails to materialize. The S&P 500 dropped to around 5,220, with most megacaps falling. Treasury 10-year yields rose three basis points to 4.23%. The dollar fell.
Economy
As inflation surged in 2022, the Federal Reserve moved to prevent a wage-hike spiral by jacking up interest rates. Now, with unemployment edging up, the central bank is signaling a willingness to cut rates to head off a job-cutting spiral – even if that means somewhat higher inflation for a while. For the first time in the current economic upswing, Fed Chair Jerome Powell used his opening statement at Wednesday’s press conference to declare that a surprise increase in unemployment could prompt the Fed to lower rates.
World
Boeing Co. announced sweeping changes to its management with its chief executive officer, head of commercial airplanes and chairman all stepping down as the company grapples with a crisis centered on its most important product, the 737 Max jetliner. Dave Calhoun, the company’s CEO will leave the company at the end of 2024, while Chairman Larry Kellner will not stand for re-election, Boeing said in statement Monday. Stan Deal, who leads Boeing’s commercial airplanes division, will also retire immediately. Chief Operating Officer Stephanie Pope will take on Deal’s role, the company said.