The Market News Today: Upcoming PCE Report to Influence Fed’s Rate Decisions

James Hyerczyk
Updated: Mar 29, 2024, 10:48 GMT+00:00

Key Points:

  • PCE report predicts 0.4% inflation rise, challenging Fed's rate cut strategy.
  • S&P 500, Dow soar; US stocks record fifth month of gains.
  • Nikkei's historic rise marks highest level since Japan's 1989 bubble.
  • Japan's Finance Minister hints at intervention amid yen's speculative drop.
  • Reddit shares plunge post-IPO; Insider selling spurs market skepticism.
The Market News Today

Expected PCE Inflation Surge Could Challenge Fed Rate Cut Plans

The upcoming PCE report, expected to indicate a 0.4% rise in consumer prices for February, could present a challenge for the Federal Reserve as it continues to navigate inflation concerns. This forecast, marking a second consecutive monthly increase, suggests that inflation pressures aren’t subsiding as hoped. The anticipated data might influence the Fed’s decision-making on interest rates, potentially delaying planned cuts. Officials, focusing on a cautious approach, seek to balance controlling inflation without hampering the strong labor market, with the report playing a key role in their strategy.

US Stocks Cap Strong Quarter with Fifth Consecutive Winning Month

US markets concluded Thursday’s trading with minimal changes, yet all major indexes achieved their fifth consecutive month of gains. The S&P 500 and Dow each touched new highs with slight increases, while the Nasdaq experienced a marginal decline. The first quarter of 2024 has been stellar for US stocks, highlighted by the S&P 500’s 22 record highs and the Dow nearing the 40,000 milestone. Strong performances from tech stocks like Nvidia and anticipations of a Fed rate cut have propelled the markets’ robust growth.

Japan’s Nikkei Records Historic Annual Surge, Reaching Highest Levels Since 1989

Japan’s Nikkei share average concluded the fiscal year with an unprecedented rise, soaring 12,328 points – the largest absolute increase ever recorded for the index. This remarkable rally saw the index reach successive record highs this quarter, surpassing levels last seen during Japan’s 1989 bubble economy. Key factors fueling this surge included improved corporate governance, increased foreign investment amid a weakening yen, and expectations of continued loose monetary policy from the Bank of Japan.

Japan’s Finance Minister Flags Yen Speculation Amid Decline

Japanese Finance Minister Shunichi Suzuki indicated on Friday that speculative trading could be driving the recent yen declines, hinting at possible market intervention to curb excessive currency falls. Suzuki emphasized monitoring the pace of the yen’s movements rather than specific levels, reiterating Tokyo’s readiness to counteract disorderly market trends. The yen’s downturn, exacerbated by the Bank of Japan’s policy stance, has reached a 34-year low against the dollar, complicating economic conditions by increasing import costs and affecting consumption and retail profits.

Reddit Shares Tumble Following IPO Surge Amid Insider Selling

After a spirited rally post-IPO, Reddit shares have plummeted, closing at $49.32, below their initial NYSE trading day close. The social media giant’s shares dipped significantly after Hedgeye Risk Management labeled them “grossly overvalued.” This decline coincided with Reddit CEO Steve Huffman and COO Jennifer Wong selling substantial shares. Despite a strong start to the week, the stock faced volatility, with New Street Research maintaining a cautious stance on its future performance.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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