US stock markets rose ahead of the US Federal Reserve’s ( Fed ) interest rate decision. On the 30th (local time), the three major New York stock market indices all recorded increases of around 1%. Dow +1.58%, S&P 500 +1.20%, NASDAQ +1.16%.
Investor attention is focused on the central bank’s monetary policy coming out this week. First of all, the Bank of Japan will decide on monetary policy today (31st) . It will be interesting to see whether the Bank of Japan will raise the upper limit on the yield on 10-year government bonds (currently 1.00%). There is an interpretation that if the upper limit is raised, the value of the severely weakened yen may rebound. Conversely, if it continues, the value of the yen could plummet.
The Federal Reserve’s monetary policy will be announced on November 1 (local time). Everyone is expecting a freeze. This is because market interest rates have risen sharply since September, which is already showing the same effect as raising the base interest rate . Deutsche Bank economists explain that the sharp rise in market interest rates over the past two months is equivalent to raising the benchmark interest rate three times by 0.25 percentage points each. “The fact that the bond market is providing the Fed with the policy tightening it wants means the Fed can be more cautious,” said Shamik Dar, an economist at BNY Mellon .
Concerns about the Israel-Hamas war have eased somewhat. On this day, West Texas Intermediate ( WTI ) futures prices fell 3.45% to $82.59. This is almost the same as the level before Hamas attacked Israel on October 7th . This is because it is believed that Israel’s ground invasion짱구카지노 도메인 of the Gaza Strip will not spread into a wider regional conflict. “Israel moved troops into Gaza over the weekend, but the operation is still not as large as feared,” says former Merrill Lynch trader Tom Essay. “It is helping to reduce geopolitical instability a bit.”
On this day, technology stocks generally rose in price. Apple’s stock price, which is scheduled to announce earnings after the market closes on Thursday, rose 1.23%. Amazon, which announced good results last week, also saw its stock price surge by 3.89%. But Tesla wasn’t like that. The stock price plunged 4.8% and closed at 197.36. It is the lowest closing price since May 26th. Japan’s Panasonic, which supplies batteries to Tesla, reduced battery production due to sluggish Tesla sales , contributing to the decline in stock prices.
As the end of the year approaches, investment strategists have become more cautious about their year-end forecasts. John Stoltzfus, chief investment strategist at Oppenheimer, a representative Wall Street bull, lowered his year-end forecast for the S&P 500 from 4,900 to 4,400. He said, “The stock price correction that has occurred for three months since August is almost coming to an end,” but revised his outlook to say that it will be difficult for the index to reach the previous estimate by the end of the year due to geopolitical risks and interest rate concerns. By .Deep Dive
*This article is an online version of the Deep Dive newsletter published on the 31st. Subscribe to Deep Dive’s newsletter, ‘Economic news you’ll fall in love with as you read it.’