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“Bottom line, the data remains mixed, leaving all of the major macro outcomes still on the table for this year,” according to Morgan Stanley strategists led by Michael Wilson.
In the meantime, companies benefiting from the AI boom are continuing to report big growth almost regardless of what the economy and interest rates are doing.
Nvidia, for example, is worth roughly $US3 trillion and rose 0.6 per cent Monday after reversing an earlier loss. It’s the first day of trading for the company since a 10-for-one stock split meant to make its share price more affordable to more investors, after it ballooned to more than $US1,000 amid the AI frenzy.
Treasury yields in the bond market were mixed ahead of reports later in the week that will show whether inflation improved last month at both the consumer and wholesale levels.
At the end of the week will come a report showing how much inflation U.S. households are girding for in the future. The Federal Reserve closely watches the measure, hoping to avoid a vicious cycle where expectations for high inflation lead to behavior that causes even worse inflation.
On Wednesday, the Federal Reserve will announce its latest decision on interest rates. Virtually no one expects it to move its main interest rate then. But policy makers will be publishing their latest forecasts for where they see interest rates and the economy heading in the future.
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The last time Fed officials published such projections, in March, they indicated the typical member still expected roughly three cuts to interest rates in 2024. That projection will almost certainly fall this time around. Traders on Wall Street are largely betting on just one or two cuts to rates in 2024, according to data from CME Group.
In the bond market, the yield on the 10-year Treasury rose to 4.46 per cent from 4.43 per cent late Friday. The two-year yield, which more closely tracks expectations for the Fed, held steady slipped to 4.88 per cent from 4.89 per cent.
In stock markets abroad, France’s CAC 40 index sank 1.3 per cent after French President Emmanuel Macron dissolved the National Assembly following surprising results in elections for the European Parliament. Far-right parties made gains, and the value of the euro dropped. Other indexes in Europe also fell, though not by as much as France’s.
Markets in Asia ended mixed. Tokyo’s Nikkei 225 index rose 0.9 per cent after government data showed Japan’s economy shrank by less in the year’s first three months than earlier thought. South Korea’s Kospi fell 0.8 per cent, while markets were closed in Shanghai, Hong Kong and Australia for holidays.
AP
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