FED: Bowman Doesn’t See Rate Cuts Being Warranted This Year
May-10 2024 16:09
- Gov. Bowman (voter) told Bloomberg News in an interview that she doesn’t see rate cuts being warranted this year.
- “I, at this point, have not written in any cuts” for 2024, Bowman said in the interview, referring to the economic projections officials submit each quarter. “I’ve sort of had an even expectation of staying where we are for longer. And that continues to be my base case.”
- She wants to see a “number of months” of better inflation data and expects it will probably be “a number of meetings” before she’s ready to cut.
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FED: NatWest Look For First Cut In September
Apr-10 2024 16:08
In addition to our 1122ET bullet on analyst view changes after today’s CPI:
- NWM now expect a first 25bp cut in Sept vs Jun previously, followed by cuts in Nov and Dec.
- They see “six additional 25bps cuts next year—reaching 3.0% by the end of Q3 2025 (instead of our earlier expectation for the end of Q1 2025).”
- “While we wouldn’t fully rule out the possibility of a rate cut in July, we feel a lot needs to happen (inflation surprises to the downside & growth/labor market dramatically slows) for officials to seriously consider a rate cut in just three months. If anything, throughout this cycle officials have erred heavily on the side of caution because the “transitory” fiasco has made officials determined not to be caught on the wrong side of the inflation story for the second time in the same cycle.”
US STOCKS: Equities Roundup: Off Post-CPI Lows, Real Estate, Utilities Lagging
Apr-10 2024 16:08
- Stocks gapped lower after this morning's higher than expected CPI inflation data squelched rate cut hopes over the next few Fed meetings. Stocks are gradually paring losses ahead midday, however, DJIA is down 497.93 points (-1.28%) at 38383.83, S&P E-Minis down 61 points (-1.16%) at 5199.25, Nasdaq down 173.8 points (-1.1%) at 16131.51.
- Laggers: Reversing direction after leading gainers yesterday, Real Estate and Utilities underperformed in the first half, estate management and investment trusts weighed on the former: Public Storage -6.47%, Extra Space Storage Inc -5.98%, SBA Communications -5.32%. Independent power and water utilities weighed on the latter: Dominion +1.19%, Sempra +1.1%, American Water Works -3.72%, AES -3.58%, Ameren Corp -3.26%.
- Leading Gainers: Energy and Communication Services outperformed in the first half, oil and gas shares buoyed the former: Targa Resources +0.7%, Marathon +0.25%, Pioneer Natural Resources +0.21%. Interactive media and entertainment shares up next: Meta +0.41%, Netflix -0.66%, Disney -0.68%
- The trend condition in S&P E-Minis is unchanged and remains bullish. The recent move down highlights a short-term corrective cycle and last week's sell-off plus today's move lower, reinforces this condition. The contract has breached bull channel support drawn from the Jan 17 low, and cleared the 20-day EMA. A continuation lower would open the 50-day EMA, at 5153.24 and the next key support. Key resistance is 5333.50, the Apr 1 high.
- Reminder, the next quarterly earnings starts in earnest late this week with JP Morgan, BlackRock, Wells Fargo, State Street and Citigroup reporting Friday, April 12.
US 10YR FUTURE TECHS: (M4) Impulsive Sell-Off
Apr-10 2024 16:00
- RES 4: 111-10+ High Mar 13
- RES 3: 110-21/31+ 50-day EMA / High Mar 27 and key resistance
- RES 2: 110-06 High Apr 4
- RES 1: 109-26+ Intraday high
- PRICE: 108-18 @ 16:54 BST Apr 10
- SUP 1: 108-15+ Low Apr 10
- SUP 2: 108-06+ 2.236 proj of Dec 27 - Jan 19 - Feb 1 price swing
- SUP 3: 108-00 Round number support
- SUP 4: 107-07+ 76.4% of the Oct - Dec ‘23 bull leg (cont)
The sharp sell-off in Treasuries Wednesday reinforces the current bearish cycle and confirms a resumption of this year’s downtrend. The contract has traded through the 109-00 handle and breached 108-25, the 2.00 projection of Dec 27 - Jan 19 - Feb 1 price swing. This opens 108-06+ next, the 2.236 projection. Initial resistance has been defined at 109-26+, Wednesday’s intraday high. Key short-term resistance is at 110-06, the Apr 4 high.
