S&P defies Fed pushback with the longest win since 21.

Nov 8
Large technology company gains have placed equities on course for their longest winning run in two years, as investors have dismissed attempts by speakers from the Federal Reserve to tone down Wall Street's dovish attitude.

Following a tumultuous opening hour of trading on Tuesday, the S&P 500 index made a clear move up, advancing for the seventh consecutive day and getting closer to the crucial 4,400-point milestone. The Nasdaq 100 had a roughly 1% increase, while cloud software firms surged and Microsoft Corp. reached all-time highs.

Bond rates have plummeted due to bets for a Fed reversal next year; the 10-year yield has dropped below 4.6%, while oil has dropped more than 4% to end at $77 per barrel.
HSBC Holdings plc strategists predict that if the Federal Reserve modifies its monetary policy and prevents a recession, global equities will rise by double digits in 2024.

"In the nine months since the last rate hike in thirty years, the S&P 500 has gained an average of thirteen percent," stated Sam Stovall, chief financial strategist at CFRA and author of "The Seven Rules of Wall Street."

According to UBS Global Wealth Management's chief investment officer for the Americas, Solita Marcelli, "the recent stock moves are consistent with our view that investor pessimism has been exaggerated." “We think the stage is set for positive total returns over the next six to 12 months, even though we continue to see near-term headwinds for equities.”

The stock rise came after an increasing number of macroeconomic worries, according to Fawad Razaqzad of City Index and Forex.com. As a result of this recovery, some investors are unsure of whether markets will continue to climb the "wall of worry."

Although Lauren Goodwin of New York Life Investments believes that rate hikes may be coming to an end, she is concerned that the market comfort we are currently seeing is only a temporary "stop on the road to recession."

Even though several central bank officials emphasized that their primary objective was to fully reduce inflation to the 2% target, stocks continued to rise.

Neel Kashkari, the president of the Minneapolis Federal Reserve, stated that officials had not yet defeated inflation and would think about tightening policy if needed, while Austan Goolsbee, the president of the Chicago Fed, stated that officials were hesitant to make choices about inflation rates in advance.

The 10-year Treasury yield has increased by more than 100 basis points since July, signaling a cumulative tightening of financial conditions. Some of the most hawkish US central bank policymakers have indicated that this could have a dampening effect on the economy, but they need more time to see how long it lasts.

Governor Michelle Bowman stated that it is too early for officials to determine the entire impact of the recent surge in yields, while Fed Governor Christopher Waller referred to the increase as an "earthquake" for the bond market.

Head of US rates strategy at BMO Capital Markets, Jan Lingen, stated, "We will be particularly alert to policymakers' thoughts on recent changes in financial conditions and what the nearly 50 basis point fall in 10-year yields and the strong rebound in equity valuations could mean for the path of monetary policy."

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