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Bloomberg
07-07-2025
- Business
- Bloomberg
Is the Dollar Resting, or Nailed to Its Perch?
To get John Authers' newsletter delivered directly to your inbox, sign up here. John Cleese's dead parrot famously wouldn't voom if you put 4,000 volts through it. Similarly, the dollar at present won't voom, even with a jolt of startlingly positive economic data. The question for the second half of this year is whether it's merely resting, or sticking to its perch only because it has been nailed there (by the exorbitant privilege which comes with being the world's reserve currency). The trend is startlingly negative, with the DXY dollar index now further below its own 200-day moving average than at any time in 20 years:
Yahoo
06-07-2025
- Business
- Yahoo
Stock market melt-up is being fueled by blind belief in lots of rate cuts in 2026
To this day, I get surprised by the storylines that develop in markets. Color me surprised by how quickly markets rebounded after the "Liberation Day" massacre. Tariffs? Who cares? More Nvidia (NVDA) stock, please! Also add me to the surprised column for how fast markets bounced off the March 2009 Great Recession lows. I vividly remember staring at god-awful economic data for much of 2009 ... and a rallying market. I return today with the latest head-scratching (though smile-inducing) narrative developing among investors: 2026 is going to be a MONSTER year for interest rate cuts, so buy stocks hand over fist today! You didn't read that wrong, friends. There are five months left in 2025 — months that will include earnings periods, tariff deadlines, a tax bill deadline, and no doubt a host of negative surprises — yet investors are already keyed in on 2026. I kid you not, and I credit Morgan Stanley for bringing this developing narrative to the surface this past week, as I have been hearing chirpings of it for weeks. Inside the latest stock market melt-up Morgan Stanley said its economics team sees seven rate cuts in 2026, a "dynamic that's likely to be a second half tailwind for back-end rates and valuation." Mike Wilson, the team's closely followed chief investment strategist, noted that "there are already signs the equity market is starting to price this now." Wilson continued, "Our work shows equity performance is strong during Fed cutting cycles even if this tailwind starts to get discounted ahead of time." Keep in mind that everything we've heard from Fed Chair Jerome Powell in recent weeks suggests that a rate cut later this month or September is far from guaranteed. June's strong jobs report further muddles the picture. Yet, back up the truck on seven rate cuts for 2026. Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments I must tip my cap to veteran Charles Schwab strategist Liz Ann Sonders for pushing back on this view. "So I have a bit of a contrarian take on that [rate cut view]. I think part of the reason, if you wanted to point to fundamental reasons why the market has done as well as it has, is actually because the Fed is not cutting interest rates. And that's because the background conditions as it relates to their dual mandate is not suggestive of the Fed needing to move to easier policy," Sonders told me on Yahoo Finance's Opening Bid (video above). Sonders added, "You also have to remember that a scenario under which the Fed is cutting, say, seven times in 2026, would be a backdrop of not much inflation tied to tariffs or otherwise, but probably significant weakening in the labor market. So it's sort of a be careful what you wish for." Here's your summer 2025 investing guide In other words, be careful in clamoring for a barrage of rate cuts in 2026 at this juncture, and stay locked in on the fundamentals of the companies you own. Here's what other investing pros are telling me on Yahoo Finance's Opening Bid about the rate outlook in 2026. "Our perspective is that the Jackson Hole meetings coming up in August, Jerome Powell will signal to the Street that they're going to reduce rates in the back half of this year. That will be a net positive. Then you'll get another chairman or chairwoman that will be coming in 2026. That one will be more dovish than Jerome Powell that will signal to the market for additional cuts. Maybe you get two or three more cuts of a quarter of a percent in 2026." "It wouldn't surprise me if rates aren't cut this year. On the other hand, maybe they will do 25 basis points or even 50. Just not big changes either way. And then next year, I think that there will be some cuts. A lot of it swings on what kind of impact the tariffs have, and not just the tariffs, but the uncertainty it creates." "At some point in the second half, we expect the Fed to cut rates. So I think all that means is the market does move higher. But there will certainly be some gut checks along the way, in our view. And the one constraint from here, even though the technical picture is very strong, is that the valuations of the market are now back to 22 multiple, which is the high end of the range that we've seen in the last few years." Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email
Yahoo
01-07-2025
- Business
- Yahoo
10-Year Treasury Notes Are Firing Up. How Much Higher Can They Go?
September U.S. Treasury note futures (ZNU25) present a buying opportunity on more price strength. See on the daily bar chart for September U.S. Treasury note futures that prices are now trending up and have just hit a two-month high. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture as the red MACD line is above the blue trigger line and both lines are trending up. Bulls have the near-term technical advantage, which means the path of least resistance for prices is presently sideways to higher. Elon Musk's Tesla Makes History With 'First Time That a Car Has Delivered Itself to Its Owner' This Defense Stock Could Be the Next Palantir. Should You Buy It Now? Cathie Wood Is Pounding the Table on AMD Stock. Should You Buy Shares Now? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! Fundamentally, there are growing notions in the marketplace that U.S. interest rates will come down yet this year. Recent weaker U.S. economic numbers and tamer U.S. inflation data suggest such. Also, President Donald Trump's administration is putting heavy pressure on the Federal Reserve to cut interest rates. A move in September T-Note futures prices above chart resistance at Tuesday's high of 112.125 would become a buying opportunity. The upside price objective would be 115-000, or above. Technical support, for which to place a protective sell stop just below, is located at 111-120. IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature. Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
CNN
27-06-2025
- Business
- CNN
Americans reined in their spending last month
The US economic engine sputtered in May: Consumer spending slowed more than expected, according to new data released Friday that also showed inflation heated up on an annual basis. Friday's report from the Commerce Department showed that consumer spending fell 0.1% last month after rising 0.2% in April. The Personal Consumption Expenditures price index was 2.3% for the 12 months ended in May, versus 2.1% in April. On a monthly basis, prices rose 0.1%, unchanged from April. Economists were expecting the PCE price index to rise 0.1% from April, resulting in the annual rate ticking up to 2.3%. They expected spending to pick up slightly to 0.3%, according to FactSet. This story is developing and will be updated.
Yahoo
26-06-2025
- Business
- Yahoo
US Treasuries Poised for Third Week of Gains on Rate-Cut Bets
(Bloomberg) — US Treasuries were headed for a third week of advances, rallying on Thursday after economic data releases reinforced bets that the Federal Reserve will cut interest rates at least twice this year. US Renters Face Storm of Rising Costs Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares Mapping the Architectural History of New York's Chinatown Squeezed by Crowds, the Roads of Central Park Are Being Reimagined US State Budget Wounds Intensify From Trump, DOGE Policy Shifts The move pushed down yields across maturities, with most tenors falling to the lowest level in more than a month. A Bloomberg Treasuries index has returned about 0.6% for the week. 'We're going to continue to rock and roll for a few reasons, in terms of lower yields,' said Andrew Brenner, head of international fixed income at NatAlliance Securities. 'There's a real fear out there that the unemployment number a week from today is going to be a lot weaker. We'll have month-end on Monday which could see some reallocation from equities to bonds.' Traders are turning their attention to the jobs report as it will provide a key data point ahead of the Fed's meeting later in the month. They are already fully pricing in two cuts by year-end, starting in September, and wagers on a third quarter-point reduction could gain momentum if the number is weak. On Thursday, the growth rate for personal spending during the first quarter — part of a revision to US first-quarter gross domestic product — was unexpectedly revised to 0.5% from 1.2%. Other economic data points — including fewer-than-expected initial jobless claims — showed unexpected strength. Short-dated bonds — which are more tied to the outlook for Fed policy — gained the most following the release, with two-year yields dipping seven basis points to 3.71% by the end of the session. The widely watched spread between the five- and 30-year points increased to more than 101 basis points for the first time since 2021 and a $44 billion auction of seven-year notes was well received. A steepening yield curve is generally associated with expectations for Fed rate cuts. Some bonds were already gaining before the economic data releases following a report in the Wall Street Journal suggesting President Donald Trump is considering naming a successor to Fed chief Jerome Powell as soon as September or October. 'Today's data showed further weakness,' said Tracy Chen, a portfolio manager at Brandywine Global Investment Management. In addition, the potential early announcement of the next Fed Chair 'and perceived less Fed independence will likely contribute further to the steepener move.' Investors and analysts reckon Powell's replacement will grant the president's demands that the Fed cut interest rates right away causing traders to price in faster and deeper cuts beginning around mid-2026, when Powell's term ends. Fed Governors Christopher Waller and Michelle Bowman in the past week have signaled they'd be open to lowering rates as soon as the next meeting. 'Waller and Bowman pushing for early rate cuts has helped the front end to rally, with the curve steepening in the process,' said Mark Dowding, chief investment officer of the BlueBay Fixed Income unit at RBC Global Asset Management. 'Trump's move to announce a Fed Chair early can increase political pressure on the Fed to cut rates and this is also a factor leading to a steeper curve.' Wagers on lower interest rates weighed on the dollar, which weakened against all of its Group-of-10 peers. The Bloomberg's Dollar Spot Index slumped 0.5% to the lowest level in more than three years. Michael Pfister, an FX analyst at Commerzbank AG, says the euro could climb to $1.18 in the coming days if policymakers continue to price in earlier rate cuts. Potential contenders to succeed Powell include former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, National Economic Council Director Kevin Hassett, former World Bank President David Malpass and US Treasury Secretary Scott Bessent, Bloomberg News has previously reported. Last week, US rates traders amassed a record futures bet that whomever Trump appoints will lead the central bank to cut interest rates almost immediately. In a Bloomberg Television interview, BlackRock Inc. portfolio manager Russell Brownback said the market would push back if the Fed's independence began to come into question. 'The markets would protest any kind of degradation of that independence very quickly,' he said. 'I believe in the sanctity of the institution.' —With assistance from Anya Andrianova, Alice Atkins, Ruth Carson and Ye Xie. How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push America's Top Consumer-Sentiment Economist Is Worried Apple Test-Drives Big-Screen Movie Strategy With F1 Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
