Stocks were mixed as rate cut doubts set in

Stocks were in mixed territory on Friday, with the Dow retreating slightly even as the prospect of deeper and earlier interest rate cuts continued to cheer Wall Street.

The Dow Jones Industrial Average (^DJI) fell 0.2%, or about 70 points, after the blue-chip index closed at a new high Thursday. The S&P 500 (^GSPC) was almost unchanged, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.2%.

Markets cheered after the Federal Reserve’s surprise shift in dovish tone this week, signaling more rate cuts in 2024 and admitting its anti-inflation campaign is gaining traction. That helped drive a record-breaking rally in US stocks, with major indexes posting six consecutive winning sessions.

read more: What is the central bank’s rate hike suspension for bank accounts, CDs, loans and credit cards?

But the upbeat mood may be starting to fade as some observers warn that markets may be getting ahead of themselves. New York Fed President John Williams told CNBC on Friday that talk of a rate cut was “premature.” In contrast to the central bank’s recent signals, central banks in Europe have not dampened hopes for policy easing.

Meanwhile, about $5 trillion in U.S. stock options expire Friday, about 80% of S&P 500-linked contracts. Some analysts believe such a massive expiration could cap any traction in at least 20 years.

Elsewhere, oil prices rose, on track for their first weekly gain since October and were boosted by the Fed’s fall in the dollar. West Texas Intermediate (CL=F) futures traded at nearly $72 a barrel, while Brent crude futures (BZ=F) settled at around $77 a barrel, after rising more than 4% in the previous two sessions.

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  • Rate cut talk ‘premature’ says Fed’s John Williams

    New York Federal Reserve President John Williams said on Friday that the central bank was not discussing interest rate cuts even as the market was riding an optimistic narrative that the central bank’s tightening campaign was coming to an end.

    “We’re not talking about rate cuts right now,” he said An interview on CNBC’s “Squawk Box.He said officials were focusing on what Sir Powell said was the primary goal at the moment: setting monetary policy to pull inflation back to 2%.

    Wall Street stepped on the gas following Powell’s comments on Wednesday as the Fed’s latest outlook was interpreted as one calling for deeper rate cuts than previously expected. That helped drive a record-breaking rally in US stocks, with major indexes posting six consecutive winning sessions.

    Optimism has already begun to fade, as Williams and other market watchers pay intervals in an upbeat mood.

    For now, talk of a rate cut is “premature,” Williams said.

  • Manhattan rents fell for the first time in more than two years

    Manhattan tenants may find themselves increasingly in the driver’s seat when negotiating with landlords.

    The market’s median rent fell to $4,000 in November, a 4.6% drop from October and a 2.3% decline from a year ago, according to a report released this week from brokerage Douglas Elliman and real estate appraiser Miller Samuel. This is the first time in 27 months that average monthly rents have fallen year over year.

    New lease contracts rose 9.7% year-over-year, but fell nearly 29% from October. Meanwhile, the vacancy rate was 2.9% in November, down from 2.4% a year ago and 2.8% in October. The Manhattan market is of national interest because it is one of the largest rental markets in the country and provides an in-demand lens from affluent renters. . The pandemic caused an exodus that drove up normal leasing patterns, but in 2022 New York’s expats returned in droves, sparking bidding wars and pushing prices to record highs.

    Nationwide, the rental market It’s getting cold, in part, because there’s so much inventory that landlords are pushing to capture rising vacancies, giving them less leverage to raise rents. Seasonality can also be a factor as demand is lower during the colder months.

  • Stocks open mixed but are slated for a winning week

    Stocks opened on both sides of the flatline on Friday as investors gasped after an initial rush of optimism over the prospect of deeper and earlier interest-rate cuts next year.

    The Dow Jones Industrial Average (^DJI) fell 0.2%, or about 75 points, after the blue-chip index closed at a new all-time high Thursday. The S&P 500 (^GSPC) slipped 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.2%.

  • Production Highlights Rare Table

    A preliminary look at manufacturing data for December on Friday highlighted a relatively quiet economic and corporate calendar.

    Economists await an early look at manufacturing and service sector activity from S&P Global released Friday morning.

    On the corporate side, Darden Restaurants’ ( DRI ) results should serve as a long-standing highlight.

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