Markets closed mixed on the first trading day of a new week, finishing at or near session lows on three of the four major indices — save the small-cap Russell 2000, which spent all day under water. The Dow, which had been up +144 points at its morning high, closed +40 points, +0.12%, while the S&P 500 went from +0.78% at session highs to +0.07% by the close. The Nasdaq swung from +1.17% at highs to -0.11% at the end of the trading day. The Russell bounced off later afternoon lows, -0.41%.
Fed Chair Jay Powell is the big market news for the early part of this week, as he appears before the Senate Banking Committee tomorrow and House Financial Services Wednesday. With two successive sessions of answering questions about how the Fed prepares to fight inflation from this vista, the usually cautious-speaking Powell will have ample opportunity to reveal the current thinking regarding monetary policy.
Then again, without what expects to make a big splash at the end of this week — the Employment Situation report for February — there’s not much Powell can do but reflect on the latest-available data. Friday’s BLS nonfarm payroll report expects to have brought in around 225K new jobs last month, less than half January’s extraordinary 517K jobs gains, which was the first metric of several last month illustrating that certain aspects of inflation were much more stubborn than others.
But Powell won’t be able to comment on this forthcoming report, nor will he on the following week’s Consumer Price Index (CPI) report, which year-over-year is also referred to as the Inflation Rate. Last month’s report was disappointing on both headline and core prints year over year, having come down a mere 10 bps each. It’s too early to tell if this resistance to the downside is a trend or perhaps a wrinkle in the overall fabric; last month’s +5.6% core CPI has come down 100 bps — a full percentage point — from September of last year. This is meaningful progress, even if we thought we’d be farther along by now.
Thus, even though Powell won’t say it, both the Fed and the markets will be very happy to see a BLS number and CPI beneath consensus and resume the steeper trajectory downward. We’d also do well to see some lower revisions to previous data — especially that huge January jobs tally. Whether Powell’s comments on Capitol Hill this week will be interpreted as increasingly hawkish as he had been in the latter half of 2022, both the Fed and market participants appear to keep the rate hike train in lower gear going forward — but not stopping just yet.
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Markets Mixed Ahead of Fed Chair on Capitol Hill
Markets closed mixed on the first trading day of a new week, finishing at or near session lows on three of the four major indices — save the small-cap Russell 2000, which spent all day under water. The Dow, which had been up +144 points at its morning high, closed +40 points, +0.12%, while the S&P 500 went from +0.78% at session highs to +0.07% by the close. The Nasdaq swung from +1.17% at highs to -0.11% at the end of the trading day. The Russell bounced off later afternoon lows, -0.41%.
Fed Chair Jay Powell is the big market news for the early part of this week, as he appears before the Senate Banking Committee tomorrow and House Financial Services Wednesday. With two successive sessions of answering questions about how the Fed prepares to fight inflation from this vista, the usually cautious-speaking Powell will have ample opportunity to reveal the current thinking regarding monetary policy.
Then again, without what expects to make a big splash at the end of this week — the Employment Situation report for February — there’s not much Powell can do but reflect on the latest-available data. Friday’s BLS nonfarm payroll report expects to have brought in around 225K new jobs last month, less than half January’s extraordinary 517K jobs gains, which was the first metric of several last month illustrating that certain aspects of inflation were much more stubborn than others.
But Powell won’t be able to comment on this forthcoming report, nor will he on the following week’s Consumer Price Index (CPI) report, which year-over-year is also referred to as the Inflation Rate. Last month’s report was disappointing on both headline and core prints year over year, having come down a mere 10 bps each. It’s too early to tell if this resistance to the downside is a trend or perhaps a wrinkle in the overall fabric; last month’s +5.6% core CPI has come down 100 bps — a full percentage point — from September of last year. This is meaningful progress, even if we thought we’d be farther along by now.
Thus, even though Powell won’t say it, both the Fed and the markets will be very happy to see a BLS number and CPI beneath consensus and resume the steeper trajectory downward. We’d also do well to see some lower revisions to previous data — especially that huge January jobs tally. Whether Powell’s comments on Capitol Hill this week will be interpreted as increasingly hawkish as he had been in the latter half of 2022, both the Fed and market participants appear to keep the rate hike train in lower gear going forward — but not stopping just yet.
Questions or comments about this article and/or its author? Click here>>