Stocks dropped, with traders parsing economic data and awaiting Jerome Powell’s speech for clues on whether the Federal Reserve will slow the pace of rate hikes to prevent a hard landing.
(Bloomberg) — Stocks dropped, with traders parsing economic data and awaiting Jerome Powell’s speech for clues on whether the Federal Reserve will slow the pace of rate hikes to prevent a hard landing.
Despite the losses in the equity market, the S&P 500 is still on track to notch its second straight monthly advance — the longest winning streak since August 2021. Bond yields rose, while the dollar fluctuated.
As the Fed Chair gets ready to take center stage at an event scheduled for 1:30 p.m. in Washington, analysts expect him to remind Americans that the central bank’s fight against inflation will run into 2023.
“We don’t expect an overly hawkish tone, but if we had to make a choice about a potential surprise from Powell’s comments today, we’d say that a more hawkish surprise is more likely than a dovish surprise,” said Matt Maley, chief market strategist at Miller Tabak.
That doesn’t mean the equity market would get “clobbered” as it did following Powell’s Jackson Hole speech in August, Maley added. “However, given what we see as the Fed’s real goals right now, a strong rally into the end of the year is less likely than a lot of people are thinking.”
Traders also waded through a slew of economic data on Thursday, with key gauges of US activity painting a mixed third-quarter picture. Job openings fell in October — a hopeful sign for the Fed as it seeks to curb demand.
Key events this week:
- S&P Global PMIs, Thursday
- US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
- BOJ’s Haruhiko Kuroda speaks, Thursday
- US unemployment, nonfarm payrolls, Friday
- ECB’s Christine Lagarde speaks, Friday
Key events this week:
- S&P Global PMIs, Thursday
- US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
- BOJ’s Haruhiko Kuroda speaks, Thursday
- US unemployment, nonfarm payrolls, Friday
- ECB’s Christine Lagarde speaks, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.3% as of 10:19 a.m. New York time
- The Nasdaq 100 rose 0.2%
- The Dow Jones Industrial Average fell 0.6%
- The Stoxx Europe 600 rose 0.5%
- The MSCI World index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.2% to $1.0348
- The British pound was little changed at $1.1948
- The Japanese yen fell 0.8% to 139.75 per dollar
Cryptocurrencies
- Bitcoin rose 2.2% to $16,828.4
- Ether rose 3.7% to $1,264.3
Bonds
- The yield on 10-year Treasuries advanced five basis points to 3.79%
- Germany’s 10-year yield advanced four basis points to 1.96%
- Britain’s 10-year yield advanced eight basis points to 3.18%
Commodities
- West Texas Intermediate crude rose 2.8% to $80.38 a barrel
- Gold futures were little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao and John Viljoen.
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