December 6, 2023

Taylor Daily Press

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Brussels is preparing to open higher after the Fed’s interest rate decision

Brussels is preparing to open higher after the Fed’s interest rate decision

(ABM FN) The Brussels Stock Exchange is expected to start higher on Thursday. Euro Stoxx 50 futures indicated gains of more than half a percent about an hour before the stock market bell.

Trading was still quiet in Brussels on Wednesday for Halloween. The Bel20 index rose 0.6 percent to 3,377 points. “October is over and investors are looking to see if there is room for a more positive outlook on the market,” said Wim Zwanenberg, investment strategist from Struve & Limberger. Stock prices fell in October, dragged down by rising bond yields.

On Wednesday evening, the Federal Reserve left interest rates unchanged, as expected, and Wall Street responded positively to Chairman Jerome Powell’s explanation, and as usual kept all options open. The S&P 500 rose 1.0 percent, while the tech-heavy Nasdaq added 1.6 percent.

Powell said, among other things, that he expects the economy to weaken in the coming months and that that will help lower inflation further, even though the Fed does not expect a recession. He also noted that rising bond yields could limit further interest rate increases, but only if long-term interest rates remain “sustainably” high.

The Fed had flagged the possibility of another rate hike and thought the move would happen this year, but this has become a little uncertain. According to the CME FedWatch tool, about 80% of the market still expects a 25 basis point increase in interest rates in December.

The Fed expects the increases to end after that and interest rates to be cut by 50 basis points next year.

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The US Treasury also announced that it will issue $112 billion in government bonds next week to refinance the national debt, which is $9 billion more than the previous quarter. That wasn’t too bad and helped relax interest rate markets. The yield on US ten-year bonds reached 4.72 percent this morning, after exceeding 5.00 percent several times last week.

There was also economic news from voucher company ADP. The October jobs report showed job growth of 113,000 jobs, up from 89,000 the previous month. It was expected to create 130,000 new jobs.

Job growth was again lower than expected. Philippe Marie, a market analyst from Rabobank, said: “The catch-up of small companies compared to large companies has reached a dead end, given the growth there by 18,000 companies and by 19,000 among small companies.” The official jobs report will follow on Friday.

It also turns out that US industry is still struggling, while construction expenses have increased. According to ISM, the industry contracted at a faster pace last month. The S&P Global PMI showed a pause.

Oil prices fell again on Wednesday after the Federal Reserve kept interest rates unchanged, while the market closely monitored the latest developments in the conflict between Israel and Hamas. December futures for a barrel of West Texas Intermediate crude closed 0.7 percent lower at $80.44 Wednesday evening in New York.

Sentiment in Asian stock markets is positive this morning. The Seoul Stock Exchange was the leader with gains of 1.7 percent, while Hong Kong, Sydney and Tokyo achieved gains of about one percent.

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The focus today is on the Bank of England and the Bank of Norway’s interest rate decisions, while weekly US support calls could also depend on interest in the run-up to Friday’s jobs report.

On the corporate front, investors are particularly keen on Apple’s numbers, after closing hours on Wall Street this evening.

Company news

Shurgard has signed a conditional purchase agreement in London for a new storage facility. This 6,600 square meter facility will provide more than 1,300 storage units.

Wall Street closing positions

The Standard & Poor’s 500 index rose 1.1 percent to 4,237.86 points on Wednesday. The Nasdaq technology stock index rose 1.6 percent to 13,061.47 points, and the Dow Jones index rose 0.7 percent to 33,274.58 points.

Source: ABM Financial News

ABM Financial News is a resource for stock market news, video and data, both for real-time trading platforms and trading rooms and for online and offline media publications. The information in this article is not intended to provide professional investment advice or a recommendation to make particular investments.

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