S&P 500 Retreats As Wall Street Bear Takes Away Expected Future Rate Cuts
It's a strange time for the stock market. It's almost like one of Aesop's fables or a fairy tale, except featuring Wall Street's bulls and bears, in which something the bear has done has affected the trajectory of stock prices.
The S&P 500 (Index: SPX) pulled back as the prospect of faster rate cuts dimmed during the final trading week of October 2024. The index fell some 1.3% to end the week at 5,728.80.
The CME Group's FedWatch Tool anticipates a 0.25% rate cut on 7 November 2024. After that, however, expectations for future rate cuts have changed. Instead of additional 0.25% cuts at 6-to-12-week intervals, the tool now projects quarter point rate cuts will take place at an average of 12-to-18-week intervals, a much slower pace.
That change in outlook hammered stocks that had recently rallied on the expectation of interest rates falling at a faster pace, which in turn pulled the trajectory of the S&P 500 into the lower portion of the redzone forecast range on the alternative futures chart. Here's the latest update of that chart, which also shows we'll reach the end of the redzone forecast range later this week.
Meanwhile, other stuff happened during the trading week that was. Here are the week's marking-moving headlines, which seasoned investors will recognize have little to nothing to do with the U.S. elections in this upcoming week.
Monday, 28 October 2024
- Signs and portents for the U.S. economy:
- Bigger trouble, bailouts developing in China:
- BOJ minions get a political problem to deal with as they are told to do nothing with interest rates:
- ECB minions thinking they don't need to hurry to deliver more rate cuts:
- Dow, S&P, Nasdaq end higher, with Big Tech earnings, payrolls data on the horizon
Tuesday, 29 October 2024
- Signs and portents for the U.S. economy:
- Fed minions being sent message to keep rate cuts going:
- Bigger trouble, stimulus developing in China:
- BOJ minions getting mixed picture of Japan's economy:
- Bigger inflation developing in Eurozone:
- Nasdaq notches record close ahead of Alphabet results; S&P rises while Dow slips
Wednesday, 30 October 2024
- Signs and portents for the U.S. economy:
- Bigger stimulus developing in China:
- Not as bad as feared, but trouble still developing in Eurozone:
- ECB minions ready to declare victory over Eurozone inflation, say they don't need to stimulate Eurozone economy any more:
- Wall Street fails to hold on to gains, ends lower ahead of Microsoft, Meta earnings
Thursday, 31 October 2024
- Signs and portents for the U.S. economy:
- Fed minions expected to deliver two more rate cuts in 2024:
- Mixed growth signs, more stimulus developing in China:
- Bigger trouble developing in Japan, Asia:
- Credibility-deficient BOJ minions boldly do nothing with interest rates:
- ECB minions seeing more inflation in Eurozone, think their policies may push inflation too low:
- Wall Street sells off on last day of October, as Microsoft, Meta rout tech stocks
Friday, 1 November 2024
- Signs and portents for the U.S. economy:
- China buying fewer U.S. farm goods:
- BOJ minions told to keep doing nothing for another six months despite warnings of factors that will boost inflation:
- Wall Street notches first two-week losing streak since August ahead of election, Fed
The Atlanta Fed's GDPNow tool's projection of the real GDP growth rate for the current quarter of 2024-Q3 plunged to +2.3% from the previous week's forecast of +3.4% growth.
More By This Author:
Median Household Income In September 2024New Home Sales Rise As Mortgage Rates Fall In September 2024, But Headwinds Build In October
How Much Should You Save For Your Emergency Fund
Disclosure: Materials that are published by Political Calculations can provide visitors with free information and insights regarding the incentives created by the laws and policies described. ...
more
Comments
