FED: Year-End Unemployment Projections Set High Bar To January Cut (3/3)
Dec-11 17:21
The SEP's unemployment forecast uncertainty will play a role in the interpretation of upcoming Employment Situation reports, including November's (October's is abridged to just the Establishment survey and therefore will not include an unemployment rate estimate) out on Tuesday.
- The median projection for the 2025 unemployment rate (a Q4 average) was unchanged from September at 4.5% with 2026 staying at 4.4% despite some speculation that they could be nudged higher.
- The range of FOMC forecasts for 2025 unemployment ticked up from 4.2-4.6% in September, to 4.4-4.6%, unsurprising given September's report showed a 4.44% unrounded rate.
- The 2025 distribution showed 7 participants eyed a 4.6-4.7% Q4 average rate. Given that 13 participants penciled in a rate cut in the end-2025 projections, it stands to reason that a majority of those supporting the cut based their view on the unemployment rate continuing to rise meaningfully in the final months of the year. from September's 4.44%
- As such a stable or lower unemployment rate in Tuesday's report for November vs September could be a key determinant in pricing out a January cut, even if as Chair Powell said "understand that [some of the data] may be distorted by very technical factors" related to post-shutdown data collection. That said, a more reliable December report for January will probably carry more weight.
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MNI EXCLUSIVE: MNI on How Fed Will Determine When to Expand Balance Sheet Again
Nov-11 17:09
- MNI lays out how the Fed will determine when to expand its balance sheet again -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
US STOCKS: Midday Equities Roundup: Tech Shares Retreat, Weighing on Nasdaq
Nov-11 16:58
- Stocks are mixed Tuesday, the DJIA outperforming weaker in SPX eminis and Nasdaq ahead midday. Generally muted activity on the Veterans Day holiday - while AI valuation concerns hampered chip makers again. Otherwise, risk sentiment was stable ahead of Wednesday's House vote to re-open/fund the government through Jan 30.
- Currently, the DJIA trades up 295.33 points (0.62%) at 47664.09, S&P E-Mini Futures 15.75 points (-0.23%) at 6840.5 Nasdaq down 184.6 points (-0.8%) at 23343.99.
- Reversing Monday's support - technology stocks led declines in the first half: Lam Research -4.20%, Hewlett Packard Enterprise -4.08%, Vistra -3.96%, Oracle -3.89%, Dell Technologies -3.82%, Micron Technology -3.65%, Teradyne -3.44% and NVIDIA -3.18%.
- Consumer Discretionary and Communication Services sector shares followed: Tesla Inc -2.62%, Tapestry Inc -2.55%, Chipotle Mexican Grill -2.17% and Garmin -2.01%; Meta Platforms -1.41%, Live Nation Entertainment -0.61% and Alphabet Inc -0.55%.
- On the positive side, a mix of Energy and Health Care sector shares led advances in the first half: Paramount Skydance +10.36%, Dexcom +5.62%, Viatris +5.26%, Align Technology +3.78%, Devon Energy +3.66%, Merck & Co Inc+3.46%, International Flavors & Fragrances +3.38% and ConocoPhillips +3.37%.
US 10YR FUTURE TECHS: (Z5) Bear Threat Remains Present
Nov-11 16:56
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-02 High Nov 5& 7 and a key near-term resistance
- PRICE: 113-00 @ 16:47 GMT Nov 11
- SUP 1: 112-09+ Low Nov 5
- SUP 2: 112-08+ 38.2% retracement of May - Oct Upleg
- SUP 3: 112-08/06 100-dma / Low Sep 25 and a reversal trigger
- SUP 4: 112-02 Trendline support drawn from the May 22 low
A short-term bear theme in Treasuries remains in place. Attention is on a reversal trigger at 112-06, the Sep 25 low, and the 100-DMA, at 112-08. A clear break of these price points would expose a trendline support at 112-02. The trendline is drawn from the May 22 low. Resistance to watch is 113-02, the Nov 5 and 7 high. Clearance of this level would highlight a potential bullish reversal.
