Latest news with #JeffreyRoach
Yahoo
4 days ago
- Business
- Yahoo
A Fed rate cut would be a 'happy pill' for markets: Strategist
Wall Street will be watching for the latest labor data in Friday's jobs report for the month of May as investors speculate on what could be the next economic catalyst to encourage the Federal Reserve to begin cutting interest rates in 2025. LPL Financial Chief Economist Jeffrey Roach and Siebert Financial CIO Mark Malek sit down with Madison Mills to discuss what a rate cut would mean for markets (^DJI, ^IXIC, ^GSPC, ^TYX, ^TNX, ^FVX) and the inflation pressures the Fed is navigating while waiting for fresh data. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. How big of a catalyst might a Fed cut coming sooner rather than later be for this market? Well, it would certainly be a happy pill for the market. Uh, a lot of the challenges that we're all looking at for the markets right now, unfortunately lower Fed funds rates are not going to necessarily help any of those challenges. However, markets ultimately always like lower rates and clearly if the Fed did do something, it would certainly send a positive signal to the market and maybe improve sentiment in the market. Jeffrey, I want to bring you back in on exactly what Mark was just saying, what would it take for the Fed to cut sooner rather than later? How bad would the economic data have to look? Well, you know, I think the Fed is really focusing on these nagging inflation pressures. You know, I referenced just a little bit ago the ISM surveys report as it relates to employment. You know, from the most recent ISM report on business that we just got two days ago, input costs are still rising pretty significantly. So that's a real concern. So the Fed is in the wait and see mode. Interestingly enough, it's it's possible that firms are in the wait and see mode too as well. Going back to labor market numbers, it seems as if firms are not interested in necessarily adding strongly to payrolls, but they're also conversely not really interested in shedding payrolls. You don't really see uh, the firings increase as well, right? The hirings and the firings, they're they're kind of static at this point. Wait and see. I think back to the original question here on when and if the Fed will act, they're certainly not going to act uh, in this upcoming meeting. Uh, it's there's a chance that they actually hold in July as well if the inflation numbers are still elevated and payrolls continue to show some stability. Mark, do you agree with that path forward for the Fed? Yeah, I I think so. I think, you know, our base case is still about two cuts for later on this year, although there was a little bit of a bump the other day in Fed funds futures. We saw that as a result of the numbers that we got, the ADP numbers. Uh, but I think at this point, they can afford to wait and I think that's the mode that they're in. Um, it's interesting though, if we look at some of the behind the scenes commentary from the Fed, such as the Beige Book, and also we saw the meeting minutes earlier in the month, there are concerns amongst the Fed. Although, whether they act on them now or later, it's more likely going to be later. And we're still focusing on two even though the market's starting to inch into possibly three when we look at futures at least. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New Straits Times
6 days ago
- Business
- New Straits Times
Wall Street ends narrowly mixed in choppy trade on weak economic data
The services sector contracted in May for the first time in nearly a year, while businesses paid higher input prices, a reminder that the economy was still at risk of slowing growth and rising inflation. Early gains in the S&P 500 evaporated toward the close and trading volume was relatively light. "Tariff impacts are likely elevating prices paid by services sector companies," said Jeffrey Roach, chief economist for LPL Financial. The ADP National Employment Report showed US private employers in May added the fewest number of workers in more than two years. Investors await Friday's nonfarm-payrolls data for more signs on how trade uncertainty is affecting the US labor market. Washington doubled tariffs on imported steel and aluminum to 50 per cent, and Wednesday was also Trump's deadline for trading partners to make their best offers to avoid other punishing import levies from taking effect in early July. Investors focused on tariff negotiations between Washington and trading partners, with Trump and Chinese leader Xi Jinping expected to speak sometime this week as tensions simmer between the world's two biggest economies. "If we can't get to an agreement on China, the tariff battle will be a headline issue for many months to come and will have an impact on both domestic and international economies," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. May saw the biggest monthly increases for the S&P 500 index and the tech-heavy Nasdaq since November 2023, thanks to a softening of Trump's harsh trade stance and upbeat earnings reports. The S&P 500 remains more than 2 per cent below record highs touched in February. Barclays joined a slew of brokerages in raising its year-end price target for the S&P 500, pointing to easing trade uncertainty and expectations of normalized earnings growth in 2026. The Dow Jones Industrial Average fell 91.90 points, or 0.22 per cent, to 42,427.74, the S&P 500 gained 0.44 points, or 0.01 per cent, to 5,970.81 and the Nasdaq Composite gained 61.53 points, or 0.32 per cent, to 19,460.49. Shares of Hewlett Packard Enterprise rose 0.8 per cent as demand for artificial-intelligence servers and hybrid cloud segment helped second-quarter revenue and profit beat estimates. GlobalFoundries rose 2.3 per cent after the chip manufacturer announced plans to increase investments to $16 billion. Shares of the fourth-largest US bank Wells Fargo ended 0.4 per cent lower, although they briefly hit a three-month high after the Federal Reserve lifted a longstanding $1.95 trillion cap on its assets. Wells Fargo CEO Charlie Scharf told Reuters he expects the bank to grow in all businesses including wealth, commercial and investment banking and credit cards, but not mortgages. Tesla fell 3.5 per cent as the electric-vehicle maker's sales dropped for the fifth straight month in big European markets. Shares of cybersecurity firm CrowdStrike slumped 5.8 per cent after it forecast quarterly revenue below estimates. Dollar Tree dropped 8 per cent as the discount store operator forecast second-quarter adjusted profit could fall as much as 50 per cent from a year ago due to tariff-driven volatility. Volume on US exchanges was relatively light, with 14.5 billion shares traded, compared to an average of 17.8 billion shares over the previous 20 sessions. Advancing issues outnumbered decliners by a 1.3-to-1 ratio on the NYSE. There were 223 new highs and 45 new lows on the NYSE. On the Nasdaq, advancing issues outnumbered decliners by a 1.18-to-1 ratio. The S&P 500 posted 23 new 52-week highs and no new lows while the Nasdaq Composite recorded 84 new highs and 35 new lows.
NBC News
7 days ago
- Business
- NBC News
Job openings showed surprising increase to 7.4 million in April
Employers increased job openings more than expected in April while hiring and layoffs also both rose, according to a report Tuesday that showed a relatively steady labor market. The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey showed available jobs totaled nearly 7.4 million, an increase of 191,000 from March and higher than the 7.1 million consensus forecast by economists surveyed by FactSet. On an annual basis, the level was off 228,000, or about 3%. The ratio of available jobs to unemployed workers was down to 1.03 to 1 for the month, close to the March level. Hiring also increased for the month, rising by 169,000 to 5.6 million, while layoffs rose by 196,000 to 1.79 million. Quits, an indicator of worker confidence in their ability to find another job, edged lower, falling by 150,000 to 3.2 million. 'The labor market is returning to more normal levels despite the uncertainty within the macro outlook,' wrote Jeffrey Roach, chief economist at LPL Research. 'Underlying patterns in hirings and firings suggest the labor market is holding steady.' The report comes just a few days ahead of the BLS nonfarm payrolls count for May. With other signs, particularly sentiment data, showing that hiring is softening, economists expect job growth of 125,000, down from the 177,000 in April but still indicative of a solid labor market. The unemployment rate is expected to hold steady at 4.2%. In other economic news Tuesday, the Commerce Department reported that new orders for manufactured goods fell more than expected in April. Orders fell 3.7% on the month, more than the 3.3% Dow Jones forecast and indicative of declining demand after swelling 3.4% in March as businesses sought to get ahead of President Donald Trump's tariffs. Shipment also fell, down 0.3%, while unfilled orders were relatively flat and inventories edged down 0.1%. Federal Reserve officials are watching the various data points carefully for clues as to how various factors are affecting the broader economic picture. There is some fear that the tariffs will raise inflation and slow hiring, though that hasn't showed up yet in the hard data. Sentiment surveys, by contrast, show heightened fears over both. 'For many sectors, I'm not hearing that the labor markets are changing in material ways,' Atlanta Fed President Raphael Bostic said in a scrum with reporters Tuesday. 'At the macro level, I haven't gotten sort of a strong overarching picture or impression that things are moving in a significant way, and we'll just have to see if that stays or whether something changes.' Traders largely expect the Fed to keep its benchmark borrowing rate steady in a range between 4.25%-4.5%, where it has been since December 2024. The market thinks the Fed won't cut again until September, and Bostic said he only would favor one reduction this year.
Yahoo
27-05-2025
- Business
- Yahoo
Stocks surge upward after Trump delays EU tariffs
Stock markets surged on Tuesday after a thaw in U.S. relations with the European Union over the weekend, with President Donald Trump delaying tariffs for another month. Stock markets surged on Tuesday, cheered by news that President Donald Trump was delaying imposing recently escalated tariffs on the European Union until July 9. They were originally set to take effect starting June 1. The S&P 500 rose 2%, putting it within 3.7% of its all-time high. The Dow rose 740 points, or 1.8%, and the Nasdaq rose 2.4%. Stocks also got a boost from improved consumer confidence numbers, with the Conference Board reporting on Tuesday that consumer confidence surged this month, its first rise after five months of decline, after a de-escalation of the trade war with China. Confidence rose 12.3 points, to 98—close to its pre–Liberation Day levels. 'Consumer confidence across various age and income groups rebounded after the U.S. and China agreed to pause retaliatory tariffs,' said Jeffrey Roach, chief economist for LPL Financial. 'Will the rebound hold? Probably not.' On Wall Street, investors showed hope that the U.S. and European Union can reach a similar deal. June 1 was the date that so-called reciprocal tariffs were set to kick in on EU products, but Trump, over the weekend, had announced new, higher tariffs of up to 50%. He walked back the threat on Sunday, telling reporters, 'We had a very nice call and I agreed to move it.' The European Union now has until July 9 to strike a new deal if it hopes to bring down the tariff rate. Nvidia gained 3% ahead of its widely anticipated earnings report Wednesday. It's the last of the Magnificent Seven technology stocks to report earnings, which so far have exceeded investors' expectations. Data-management company Informatica rose 6.2% after Salesforce said it would buy the AI-powered company for $8 billion. Salesforce rose 1.8%. Yields on the 10-year and 30-year Treasuries fell as investors breathed a sigh of relief. But the threat of future policy changes still looms. 'We focus on actions over words as economic constraints spur policy rollbacks,' BlackRock Investment Institute wrote Tuesday. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Times
02-05-2025
- Business
- New York Times
Stocks on Track to Erase Losses From ‘Liberation Day'
Stocks were on track on Friday to erase their losses from the days after President Trump's chaotic rollout of tariffs in early April, bolstered in part by a healthy report on the labor market. The S&P 500 rose 1.6 percent by Friday afternoon, climbing back above where it stood before chaos descended on financial markets after April 2 — Mr. Trump's so-called 'Liberation Day,' which featured his most sweeping tariffs to date. Friday's boost to stock prices followed a stronger-than-expected report on hiring in April. But the S&P 500 has been edging higher for days — Friday's gain would be its ninth consecutive daily increase — as Mr. Trump and members of his administration raised hopes that trade tensions would ease, including by indicating they were willing to engage in talks with Friday, China's commerce ministry in a statement said it too was considering holding talks with the Trump administration, but only if Washington cancels its tariffs on Chinese goods first. The two countries remain far from any deal that would resolve the trade war between them, but even the prospect of talks has been enough to ease the worst of the anxiety that gripped investors a month ago. 'If the labor market holds up and the Trump administration walks back the most egregious tariffs, the economy could skirt a deep recession,' said Jeffrey Roach, chief economist at LPL Financial. Still, despite the recent optimism and recovery, the S&P 500 is more than 7 percent below its recent high in mid-February. It has fallen about 5 percent since Mr. Trump's inauguration in January. Questions remain about whether Mr. Trump's tariffs might cause a sharp slowdown in economic growth, which could result if companies start pulling back on hiring, spending and investments amid the uncertainty. Though Mr. Trump backed off the most extreme tariffs on dozens of countries, many imports into the United States now face new taxes of at least 10 percent, while products from China are being taxed a minimum of 145 percent. On Friday, a provision that had allowed for low-value shipments from China and Hong Kong to evade tariffs altogether closed. And on Saturday, new tariffs of 25 percent on imported auto parts are expected to take effect. That's in addition to a tax of 25 percent on imported cars that already took effect in April. Volatility in recent weeks has underscored the degree to which sentiment on Wall Street is still driven by concern about the economic fallout from the Trump administration's policies. Mr. Trump's 90-day pause of many of the tariffs that he announced on April 2 will end in July. 'The damage to economic momentum has already been done,' said Mike Sanders, head of fixed income at Madison Investments. 'Deals may come, but the real question is how long the data will take to reflect the harm.'
