2023-12-21 14:42:09
The Dow Jones Index opened the market up more than 200 points in response to the US economy expanding less than expected in the 3rd quarter of 2023, which will be a factor supporting the US Federal Reserve (Fed) to stop raising interest rates. and begin reducing interest rates next year.
As of 9:31 p.m. Thai time, the Dow Jones Industrial Average was at 37,314.22 points, plus 232.22 points or 0.63%.
Moreover, the market was supported by the weakening of the dollar. and the 10-year US government bond yield fell close to 3.8% today.
The weakening of the dollar will boost the profits of listed companies with foreign revenue. As for the decline in the yield on the 10-year US government bond, which is a US government bond used as a reference for determining the price of debt instruments around the world. This includes US mortgage interest rates. It will give consumers more money to spend. and help reduce debt service costs for companies This allows these companies to increase investment. and increasing dividend payments to investors
CME Group’s FedWatch Tool indicates that investors expect The Fed will begin cutting interest rates at its March 2024 meeting. And the Fed will cut interest rates 6 times in 2024, cutting interest rates by 0.25% each time, for a total of 1.50%, more than the Fed has signaled to cut interest rates 3 times, by 0.25% each time, for a total of 0.75%.
The U.S. Department of Commerce today released its third estimate for 3rd quarter 2023 gross domestic product (GDP), saying the U.S. economy expanded 4.9% in the quarter. This was lower than analysts’ estimates of 5.1%, while the first and second estimates were 4.9% and 5.2%, respectively.
The US economy expanded 2.2% and 2.1% in the first and second quarters, respectively.
The market is keeping an eye on the release of the Personal Consumption Expenditures (PCE) price index tomorrow. This is the measure of inflation that the Fed cares regarding. Because it can detect changes in consumer behavior and covers the prices of goods and services more broadly than the Consumer Price Index (CPI).
Analysts expect that the Headline PCE index, which includes food and energy categories, rose 2.8% year-on-year in November from 3.0% in October.
When compared monthly, it is expected that the general PCE index will not change in November. or increased by 0.0% from the level of 0.0% as well in October.
As for the Core PCE Index (Core PCE), which does not include food and energy categories. It is expected to increase 3.4% in November year-on-year from 3.5% in October.
On a monthly basis, it is expected that the core PCE index increased 0.2% in November following also increasing 0.2% in October.
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