A television station on the floor of the New York Stock Exchange broadcasts a speech by Jerome Powell, chairman of the U.S. Federal Reserve, after the meeting of the Federal Open Market Committee on December 18, 2024.
Michał Nagel | Bloomberg | Getty Images
This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors the latest news wherever they are. Like what you see? You can subscribe Here.
What you need to know today
The Fed may force its hand on global banks
Wednesday's indication from the U.S. Federal Reserve said yes expects fewer rate cuts in 2025 than previously expected, caused confusion in the markets and strengthened the strength of the dollar. Global central banks insist that their monetary policy is independent of the Fed, but such currency moves can force them to act.
Markets fall, but Dow stops losing streak
On Thursday, o S&P500 AND Nasdaq Composite decreased slightly, a Dow Jones Industrial Average he made a small profit break the losing streak. Asia-Pacific markets fell on Friday. Australia S&P/ASX200 fell 1.24% to a three-month low before paring some of its losses. The Chinese and Japanese markets fell after the release of separate macroeconomic data from the agencies of both countries.
Interest rate and inflation updates
The People's Bank of China left its base interest rates on Friday for one- and five-year loans unchanged at 3.1% and 3.6%appropriately. Meanwhile, Japan's “core” inflation rate, which excludes fresh food and energy – and is monitored by the Bank of Japan – increased to 2.4% in November. This is the highest result since April.
Partial US government shutdown?
A House bill to fund the government for three months and suspend the debt ceiling for two years failed to pass on Thursday evening. Thirty-eight Republicans joined the majority of Democrats in voting against it agreementwhich was approved by US President-elect Donald Trump. Without an agreement and adoption of legislation, a partial shutdown of U.S. government operations will begin late Friday evening.
(PRO) “Reversing the truck” moment.
The S&P 500 fell on Wednesday and continued to decline slightly on Thursday. But that's the point at which to “stop the truck,” said Tom Lee, head of research at Fundstrat Global Advisors. This suggests that, on the contrary, now is a good time to buy shares. Here are the trends Lee is keeping an eye on support his hypothesis.
The most important thing
If you look objectively, the main US benchmarks did not change significantly during Thursday's session.
The S&P 500 fell 0.09%, the Nasdaq Composite fell 0.10%, but the Dow Jones Industrial Average rose 0.04%.
However, looking at the context of Wednesday's market failure, the direction of these changes also points, albeit weakly, to a market-making narrative.
Another way to put Thursday's stock market is this: After the Fed released its forecast, stocks mostly continued to fall, but the Dow finally snapped a 10-day losing streak.
It's kind of a mixture. Should investors continue to be cautious given the downtrend? Or should they view the Dow's breakout as a glimmer of light at the end of the tunnel?
As with all issues in the markets, there are no clear answers. The only thing that is more certain is that data like today's US personal consumer spending price index for November will have a stronger impact on markets than before.
“Whatever the reaction, it's likely to be more severe in one way or another than it was before the Fed expectations actually rose,” said Mike Dickson, head of quantitative research and strategy at Horizon Investments, citing Fed projection that PCE will be higher than the central bank's target of 2%.
Indeed, on Wednesday, Wall Street's fear gauge rose 74% to 27.62 the second largest jump in history. And even though the VIX cooled 12.8% on Thursday, it still closed above 20, a sign of heightened levels of fear in the market.
It's a bit ironic, but volatility may be the only thing that's more certain right now.
— CNBC's Sarah Min, Sean Conlin, Brian Evans and Pia Singh contributed to this report.