(CercleFinance.com) – Wall Street continued its rise on Thursday and set new records in a market which retained all its enthusiasm in the face of the change in strategy decided yesterday by the Fed.
At the end of the morning, the Dow Jones advanced 0.3% to 37,195.4 points, while the Nasdaq Composite gained more than 0.3% to 14,785.8 points.
As widely anticipated by the markets, the American Federal Reserve kept its rates unchanged on Wednesday, while opening the door to a ‘pivot’, that is to say a future easing of its monetary policy.
Its forecasts regarding the evolution of rates, nicknamed the ‘dot plots’, have thus been modified to now reveal the hypothesis of three rate cuts in 2024.
Some analysts are almost surprised by this posture, emphasizing that the central bank seems in a hurry in several respects to start the process of lowering key rates.
‘Not only that, the timetable for lowering rates was mentioned during the monetary policy council’, underline the Groupama Asset Management teams.
‘But above all, central bankers are now concerned about the risk that rates ‘remain too high, too long’, adds the asset manager.
The mixed economic indicators revealed in the morning did not dampen the enthusiasm of the markets.
Expected to decline, retail sales rebounded by 0.3% sequentially in November, supporting the scenario of a ‘soft landing’ of growth mentioned yesterday by the Fed.
But the Department of Labor recorded 202,000 new registrations for unemployment benefits during the week of December 4, a figure down by 19,000 compared to the previous week.
This decline shows that normalization of the job market takes time.
Finally, import prices continued to decline in November (-0.4%) due to the decline in oil prices, a sign that the strength of the dollar continues to limit pressures due to imported inflation.
In this context, the yield on Treasuries has returned to around 3.94%, below the technical threshold of 4%, a first since the summer.
The euro continues to regain ground against the dollar, not far from the threshold of 1.10, as currency traders no longer seem so sure that the ECB will get ahead of the Fed in this cycle of rate cuts.
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