After stumbling late yesterday, stocks are trying to find their footing again this Friday morning. Crude oil is up around a percent, while gold and silver are down around a percent. Treasuries are higher in price, while the dollar is flat.
Federal Reserve Chairman Jay Powell finally did what no one else could for the past week-and-a-half: Get the stock market to take a breather! The markets suffered a late-day swoon after Powell said in an International Monetary Fund speech that the central bank was “not confident” it had done enough on the interest rate and inflation-fighting front. He also warned of potential “head fakes” in the data, which has been more encouraging of late.
That said, he did NOT strongly imply the Fed wanted to hike at its next policy meeting. It’s the last one of 2023, and it concludes on Dec. 13. Interest rate futures markets are only pricing in a roughly 9% chance of another 25 basis point hike at that meeting; the current rate target is 5.25% - 5.5%. And as you can see here, the benchmark 10-year Treasury Note yield has come off the boil in the last month.
10-Year Treasury Note Yield Index (TNX)
Chinese President Xi Jinping and President Biden confirmed they will be meeting this coming Wednesday in person. The venue is the Asia-Pacific Economic Cooperation summit in San Francisco. Xi and Biden have not met or spoken directly since another gathering in Bali a year ago, and this session comes amid rising tensions over the militarization of the South China Sea, Taiwan territorial independence, technology and rare earth trading, spying and election interference, and more.
Finally, if you love the airplane boarding process as much as I do (ahem), I have some bad news. Recent changes implemented by United Airlines (UAL) aren’t going to get copied by Delta Air Lines (DAL) or others anytime soon. The so-called “WILMA” plan that United started using in the last month is supposed to shave two minutes off the boarding process.