U.S. stocks were almost flat on Wednesday after a top Federal Reserve official hinted that the central bank has ended interest rate hikes, opening the door to a possible rate cut.
The Dow Jones Industrial Average (^DJI) and the S&P 500 benchmark index (^GSPC) held near the flat line, while the tech-heavy Nasdaq Composite (^IXIC) fell approximately 0.1%.
Hopes for a political turnaround grew after Fed Governor Christopher Waller. He said "there was no reason" insist that rates stay "really high" if inflation continues to cool consistently.
While the governor of the Federal Reserve Michelle Bowman differed.other officials echoed Waller's dovish comments, while Chicago Federal Reserve President Austan Goolsbee expressed concern about keeping rates "too high for too long."
Read more: What the Fed's pause in rate hikes means for bank accounts, CDs, loans and credit cards
influential investor Bill Ackman is among those We are now betting that the Federal Reserve will begin cutting rates sooner than expected, saying the move could happen as early as the first quarter.
Captivity extended profits driven by dovish comments, with the 10-year Treasury yield (^TNX), which moves inversely to prices, falling around 6 basis points to around 4.28%, its lowest level since September.
A new reading of US third-quarter GDP showed that The US economy grew by 5.2% annualized rate for the last quarter, revised upward from the previous reading of a pace of 4.9%.
In individual stocks, General Motors (GM) shares rose about 10% at the open after the auto giant said it would buy back $10 billion in shares and increase your dividend in a third.
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jGameStop soars more than 20%
Game stop (GME) stocks are rising again.
Shares of the video game retailer rose more than 20% on Wednesday and are now up more than 35% over the past five days.
The movement arises as Reports have swirled that an increasing number of bets have been placed on a call option for GameStop shares to reach $20 per share by December 8.
GameStop is the latest speculative trade to enter the November 2023 stock market rally, as beaten-down areas of the market such as cryptocurrency-related stocks and other meme names are seen. are obligated.
He move to a higher risk operation in the markets occurs when investors have interpreted a series of economic data showing cooling pressures on prices combined with a slowdown in the labor market It means that the Federal Reserve has finished raising interest rates.
"'Meme stocks' tend to be unprofitable, so they especially benefit from lower rates as they have an even greater need to raise capital at reasonable prices," DataTrek co-founder Jessica Rabe explained in a note. on November 20.
Rabe added: "Meme stock's current positive momentum shows that investors' animal spirits are starting to warm up again."
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Brian Sozzi of Yahoo Finance spoke with several company executivesIt's about what Charlie Munger meant to them after Munger's death Tuesday.
Below is a summary of some of the comments:
Costco (COST) CEO Craig Jelinek (Munger was a long-time board member from Costco)
"He was a legend to me. A tremendous asset to Costco."
Steve Squeri, CEO of American Express (Amex is a long time holding of Berkshire)
"My thoughts are with Charlie Munger's family, my friend Warren Buffett and everyone at Berkshire Hathaway, the iconic company they built together. Charlie was a legendary investor and his philosophy of investing in great businesses that could stand the test of time will continue. to be emulated by generations to come."
James Quincey, CEO of Coca-Cola (Coke is a long time holding of Berkshire)
"Charlie was exceptional; he was a smart business mind whose innovative ideas left an indelible mark and truly improved our world."
Brian Moynihan, CEO of Bank of America (BofA has long been a Berkshire farm)
"Charlie Munger was a legendary figure in the investment community. There are many who benefited greatly from his wisdom."
Yahoo Finance also compiled some of Munger's most memorable quotes here.
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General Motors Stock Soars on Rise of Division
General Motors (GM) shares rose about 10% on Monday after launching the largest share buyback program in its history.
The car company will increase its dividend by 33% and will buy back $10 billion in shares.
"It's about not only us being profitable, but also generating strong cash flow from a growing fuel and electric vehicle business and a growing software business," said GM CEO Mary Barra. , to Yahoo Finance Live. "It is demonstrating our confidence in our strategy and ability to grow, generate free cash flow, as well as strong margins."
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Third Quarter GDP Revisions Deepen 'Goldilocks' Narrative for US Economy
The growth of the US economy continues to surprise upwards while inflation decreases.
New data from the Bureau of Economic Analysis revealed that the US economy grew at an annualized rate of 5.2% in the third quarter, compared to the 4.9% reported in the advance estimate a month ago.
The quarterly reading of Personal Consumption Expenditures (PCE) showed that underlying prices, which exclude volatile categories such as food and energy, grew at a pace of 2.3% during the third quarter, down from an initial reading of 2.4 %. The release showed that inflation continues to cool toward the Federal Reserve's long-term goal of 2% inflation.
Raymond James Chief Economist Eugenio Alemรกn described the print as a "Goldilocks scenario," meaning the economy is growing at a solid pace but not so fast that the Federal Reserve has to worry about this poses an upward risk to inflation.
That reading comes as recent comments from Federal Reserve Governor Christopher Waller led investors to believe that interest rate cuts could come sooner than initially expected. waller said There was "no reason" why rates should be kept "really high" if inflation continues to decline consistently.
"Maybe [Wednesday's revision] "It was the reason why several Fed spokespeople have been relatively dovish lately and will likely solidify the market's conviction that the Fed is done raising interest rates in this cycle," Alemรกn wrote in a note from investigation on Wednesday. "This is good news for the economy and for the markets."
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Stocks open higher as yields fall
Stocks opened higher on Wednesday, as a new reading of Gross Domestic Product showed the U.S. economy grew at a faster pace than previously reported in the third quarter and comments from Federal Reserve officials hinted that the cuts in Rates could arrive sooner than markets initially thought.
The Dow Jones Industrial Average (^DJI) rose almost 0.2%, while the benchmark S&P 500 index (^GSPC) rose about 0.5%. The tech-heavy Nasdaq Composite (^IXIC) rose approximately 0.7% after the three stock market indicators closed higher Tuesday to resume their November demonstration.
Captivity extended profits driven by dovish comments, with the 10-year Treasury yield (^TNX), which moves inversely to prices, falling around 6 basis points to around 4.28%, its lowest level since September.
Read the latest financial and business news from Yahoo Finance
