Tuesday saw stocks maintain their strong performance, expanding gains for the seventh consecutive day as investors were encouraged by the Federal Reserve’s decision to halt its tightening campaign this year.
The benchmark S&P 500 (^GSPC) gained around 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) increased 0.9%, extending its own winning run. The Dow Jones Industrial Average (^DJI) rose by around 60 points, or almost 0.2%.
The market was informed by recent indications of a slowing US economy that the Fed would scale down its rate rises. However, central bankers have stated that even in the event that policymakers choose to temporarily halt, more hikes are still possible.
However, investors have many cautious voices to temper their enthusiasm, such as Minneapolis Fed President Neel Kashkari, who stressed on Monday and Tuesday that the central bank probably still has some work to do to control inflation, even though the market’s momentum has swung to a more optimistic reading. Several other hardline Fed members expressed caution on Tuesday, including Kashkari. Chair Jerome Powell is scheduled to speak later this week.
At the conclusion of last week, there was a lot of excitement surrounding the perceptions that the US economy will have a gentle landing, the Fed is done, and the employment market is slowing down, according to Michael Hewson, chief market analyst at CMC Markets UK, who spoke to Reuters. “People’s perceptions have begun to clarify up. The possibility exists that the Fed may increase once again.”
Despite the possibility of Saudi and Russian production cutbacks, the new worries raised by the Fed muddled the oil future and helped drive WTI crude prices below $80 a barrel for the first time in more than two months. Both Brent and West Texas Intermediate crude futures (CL=F) fell 4% to $81.76 and $77.48 a barrel, respectively.
The fact that trade statistics indicated China’s imports increased but exports unexpectedly jumped in October—a hint of faltering foreign demand—also weighed on oil prices. However, there was good news for the second-biggest economy in the world: the IMF raised its predictions for GDP growth in the nation this year and the next.
The amount Disney (DIS) may charge for its upcoming new ESPN streaming service has been met with scepticism from Wall Street. Sports fans, according to the company’s former head of streaming, are prepared to pay a fee that exceeds what the majority of platforms presently charge.
At the Yahoo Finance Invest Conference on Tuesday, Kevin Mayer, the current CEO of Blackstone-backed entertainment company Candle Media, stated, “People have always paid a lot for sports.” “They didn’t always know it because back in the day when 95% of this country had paid TV bundles, probably 40% to 50% of the cost of that bundle was sports programming. … [But] now they can do so explicitly.”
His remarks coincide with the fact that Disney’s stock has fallen for several years, and activist investor Nelson Peltz is advocating for the firm to add more board members. The company’s streaming business is not yet profitable, its linear TV segment is contracting, and its parks business is slowing down.
Mayer stated that his previous employer is “definitely most focused on making sure that ESPN, a company that he really believes in strongly, is well positioned for the future.” Mayer is presently working with CEO Bob Iger as a strategic consultant.
Pricing for the ESPN service has not been made public by Disney, but experts have calculated that it would need to cost at least $30 a month to break even, much alone make a profit.
There’s still a chance for a significant decline in inflation that doesn’t lead to a recession, according to Chicago Fed President Austan Goolsbee.
In an interview with CNBC on Tuesday, Goolsbee stated, “Over the next couple of months, we might equal the fastest drop in inflation in the last century.” “So we’re making progress on the inflation rate.”
Goolsbee pointed out that when central bankers had to significantly lessen price pressures in earlier struggles against inflation, a recession typically ensued. However, he noted that because of the size of the inflation decrease that would be necessary, a gentle landing in this tightening cycle would accomplish what has never been done before.
At a record high of $1.08 trillion, credit card balances increased by $48 billion in the third quarter, according to figures issued by the Federal Reserve Bank of New York on Tuesday. The debt rise of $154 billion over the course of the year was the most since the series’ start in 1999. According to Gabriella Cruz-Martinez of Yahoo Finance, the 90-day delinquency rate metric for credit cardholders rose to 5.78% at the same period from 3.69% a year earlier.
The statistics indicated that rising delinquencies were seen across income levels and geographic areas, but they were most severe among millennials and those with school or vehicle loans.
The new information is released at the same time as the federal student loan payment moratorium of three years ended in October and credit card interest rates rose to 38 years.
Marriott CEO Anthony Capuano stated that the company remains committed to the Middle East business despite the possibility of further instability in the region as a result of the fighting in Israel and Gaza. Capuano stated in a live interview at Yahoo Finance Invest, “We’ve got a robust pipeline across the region,” and that retaining guests in the hotel ecosystem is a major focus. More than two dozen Marriott properties may be found in Egypt and Lebanon.
Additionally, Capuano highlighted the company’s expansion into China, its second-biggest market. There, he claimed, the operational environment “is more than fully recovered to pre-pandemic levels.” According to him, Marriott has launched its 500th hotel in China and has 400 more in the works.
Because Marriott is an asset-light corporation, Capuano said his company has been able to keep above the geopolitical fray, even as the US and China struggle with increased economic and national security concerns.
The majority of the 500 hotels that Marriott already owns in China and the hundreds more that are planned are “almost entirely China-owned,” he added.