U. S. stock index futures fell slightly before trading on Wednesday, with widespread bets that the Federal Reserve would maintain current interest rates and continue to be hawkish. ADP employment increased by 19% in AprilBingoslotsonline.20,000, the largest increase since July 2023.
As of press time, Dow futures are down 0.Bingoslotsonline.2%, the S & P 500 index fell 0.4%, and the Nasdaq futures fell 0.7%.
Markets are closed in many parts of Europe and Asia, trading is light and the market is wary.
WTI crude oil futures fell 1.9 per cent and Brent crude futures fell 1.6 per cent.
The tough stance of Fed officials on interest rates contributed to an across-the-board rally in the dollar, hitting a weekly high of 106.40.
Us ADP employment rose by 192000 in April, the biggest increase since July 2023 and higher than the expected 175000.
Nela Richardson, chief economist at ADP, said hiring in April was based on a broad basis. Only the information industry-telecommunications, media and information technology-performed weakly, with job losses and the slowest wage growth since August 2021.
It seems certain that the Fed will not cut interest rates tonight.
Thursday, May 1, US Eastern time 14 p.m.BingoslotsonlineThe Federal Reserve will release its interest rate decision at 2:00 on Thursday, May 2. Federal Reserve Chairman Colin Powell will hold a press conference on monetary policy half an hour after the interest rate decision is announced.
Investors will keep a close eye on the press conference after the Fed meeting for further guidance. It is worth noting that the Fed's hawkish tone is likely to boost the dollar and limit further gains in precious metals.
The Fed is widely expected to maintain its current restrictive policy stance until it is more confident in controlling inflation, and the FOMC meeting will continue to keep interest rates at their highest level in more than two decades, that is, keeping the target range for federal funds at 5.25-5.50%.
Expectations of interest rate cuts for 2024 have been repeatedly delayed this year because of stubborn inflation, and traders now expect the Fed to cut interest rates only once this year, well below their expectations of about six times at the start of the year.
In his last speech, Mr Powell said policymakers were likely to keep interest rates high for longer than previously expected, explaining that there was a lack of further progress in reducing inflation and that the labour market remained strong.
Traders' expectations of Fed easing have fallen, with a chance of a rate cut of about 10 per cent in June and less than 75 per cent in September, according to CME's FedWatch tool.
What is the cost of QE in the United States? Veteran head of the Federal Reserve: total bill may exceed $500 billionBingoslotsonline!
This week, the Fed is likely to announce plans to slow the pace of contraction. Bill Dudley, former chairman of the New York Fed, wrote on Tuesday that while the Fed's quantitative easing was effective, it was too expensive and the total cost could exceed $500 billion.
Dudley said that while QE stabilized the market during the COVID-19 epidemic and provided stimulus without further interest rate cuts, the cost of the Fed's asset purchase program must also be taken into account.
Dudley believes that the Fed's overexpansion of its balance sheet directly pushes up the cost of quantitative easing. The last $1 trillion of asset purchases completed between June 2021 and March 2022 could end up costing the Fed (and US taxpayers) $100 billion with little gain. He called on Fed officials to evaluate QE in next year's review of the monetary policy framework, learn from past mistakes and control costs.
This past April, the watershed of this year's market?
Overnight, U. S. stocks and debt, international crude oil continued to decline, gold and Bitcoin also continued to decline.
Looking back at the whole of April, the US macro economy was a disaster: the Citigroup economic accident index plummeted to 7.6 from above 40 in early April.
Behind the jitters in US financial markets, the threat of stagflation is too serious to be ignored. Given that economic growth is lower than expected and inflation is generally higher than expected, Wall Street fears that a stagflation crisis comparable to that of the 1970s is imminent in the US.
For investors, the question is, how long will the sell-off in US equities and bonds last?
According to Morgan Stanley's quantitative analysis, if US stocks continue to fall, the current systematized fund is expected to be forced to sell a large number of stock positions due to its extremely large long positions, causing the stock market to fall further.
Focus stocks
Starbucks fell more than 12% before trading. The performance of Magi Q2 was lower than expected.
Pfizer rose more than 3% before trading, exceeded first-quarter revenue and raised its full-year EPS forecast.
AMD fell by more than 6% before trading. The outlook for sales of AI chips was lower than expected.
Pinterest rose more than 15% before trading, and the performance of Magi Q1 exceeded expectations.
CVS plummeted more than 11% before trading, slashing its full-year profit forecast.
New York community banks rose more than 10% before trading, with provisions for credit losses of $315 million in the first quarter.
