The S&P 500 finished nearly unchanged for the day, down 0.36, or less than 0.1%, at 4,719.19. But it’s still hanging within 1.6% of its all-time high set early last year, and it closed out a seventh straight winning week for its longest such streak in six years.
The Dow Jones Industrial Average, which tracks a smaller slice of the
Stocks overall bolted higher this week after the
The S&P 500 has jumped roughly 15% since late October on rising hopes for just such a pivot. Lower rates not only give a boost to prices for all kinds of investments, they also relax the pressure on the economy and the financial system.
Hopes for several cuts to rates from the Fed in 2024 have sent
The 10-year yield eased further on Friday. It slipped to 3.91% from 3.92% late Thursday. It had been above 5% in October and at its highest since 2007.
With inflation down from its peak,
Of course, some more cautious investors say markets have gotten ahead of themselves in their ebullience. The big moves seem to be predicated on the
The Fed’s goal has been to slow the economy and grind down prices for investments enough through high interest rates to get inflation under control. It then has to loosen the brakes at the exact right time. If it waits too long, the economy could fall into a painful recession. If it moves too early, inflation could reaccelerate and add misery for everyone.
That’s a lot of ifs. Plus, many critics say the number of rate cuts that traders are expecting in 2024 doesn’t seem likely unless the
With the huge rallies so far, “markets all-in on infallible Fed,” strategist
Those rallies may also be threatening the futures investors are banking on. Lower
A preliminary report on Friday indicated growth for
“Looser financial conditions have helped boost demand, business activity and employment in the service sector, and have also helped lift future output expectations higher,” said
Williamson also said a measure of pressure on inflation “remains sticky but at a level which is indicative of” inflation at the consumer level running only modestly above 2%.
In stock markets abroad, Hong Kong’s Hang Seng index jumped 2.4%, with stocks of property developers rising after some Chinese cities eased buying restrictions. The
Most other markets around the world have been strong in 2023 amid hopes for cooling inflation and anticipation for cuts to interest rates.
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AP Business Writer
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