Nasdaq Market Site in New York, USA, Monday, September 16, 2024.
Yuki Iwamura Bloomberg Getty Images
This report is from today’s CNBC Daily Open, our international market newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. As you see? You can subscribe here.
What you need to know today
new high
US stocks rallied on Thursday. At S&P 500 and Dow Jones Industrial Average marked a new record close, while tech-heavy Nasdaq Composite had its fourth best day of the year, supported by a rally in technology. Asia-Pacific markets usually rose on Friday. Japan’s Nikkei 225 added about 1.7% as the country’s core consumer price index rose 2.8% year-on-year.
Rates are stable in China and Japan
Asia’s two main central banks made interest rate decisions on Friday. The People’s Bank of China left the one-year and five-year loan interest rates unchanged at 3.35% and 3.85%, respectively, defying expectations. The Bank of Japan also kept rates on hold at “around 0.25%,” a move that was in line with a Reuters poll forecast.
Tech increases
After taking a day to digest the US Federal Reserve’s rate cuts, investors flocked to tech stocks. on Thursday, Tesla up 7.4%, Nvidia arise 4% and Apple an increase of 3.7%. Raised by that stock, the Nasdaq rose 2.5%, the fourth largest one-day gain in 2024. The sharpest rally this year was a 3% rise on February 22.
“Re-calibrate”
Fed Chairman Jerome Powell’s use of the phrase “recalibration” appeared to reassure investors that the central bank’s 50 basis point cut was not the case. apprehensive. This signals that the Fed is not responding to a slowing economy, but instead is focusing on making sure employment does not fall, CNBC’s Jeff Cox said.
(PRO) Commodity price movements
Stocks have rallied on the back of the Fed’s rate cut. Lower rates also increase demand for commodities – but it’s not always easy. To predict the performance of commodities, such as gold, copper and oil, analysts from Citi and HSBC look at historical movements after the cut.
Bottom line
“Twenty-four little hours / Bringing sun and flowers / Where there used to be rain,” sings American 1950s star Dinah Washington.
Washington might be singing about market behavior. Immediately after the Fed announced a jumbo rate slash on Wednesday, stocks hit fresh highs before falling into the red later in the day.
But twenty-four hours later, after investors assessed that the half point cut probably does not portend the beginning of recession, the main index rallied to close at a record high.
At S&P climbed 1.7% to end at 5,713.64, the first time the broad-based index has broken through the ceiling of 5,700. In addition, the Dow closed at 42,025.19, the first time above the 42,000 level, after the index rose 1.26%.
At Nasdaqbuoyed by public meetings in the name of the like Tesla, Nvidia and Applewas the biggest winner among the major indexes, rising 2.51%, for the fourth best day of the year.
And while history shows that September hasn’t been good for stocks, it also tells us that while the S&P notches record highs for the month, the fourth quarter is likely to remain strong. Since 1950, this pattern has played out on 20 out of 22 occasions, Oppenheimer noted.
Indeed, BMO is so bullish about the market that the bank raised its year-end targets for S&P to 6,100 – up 8.6% from Wednesday’s close – the highest projection on Wall Street.
“Like our last increase in May, we continue to be surprised by the strength of the market and again decide that there is more than an incremental adjustment,” Chief Investment Strategist Brian Belski told clients in a note Thursday.
At the end of Washington’s song, he croons, “What a difference a day makes / And the difference is you.” Powell may feel like Washington is serenading him.
– CNBC’s Alex Harring, Fred Imbert, Hakyung Kim and Lisa Kailai Han contributed to this story.