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Why Tom Lee says the odds favor a stock-market rally after the Fed decision
Why Tom Lee says the odds favor a stock-market rally after the Fed decision

Yahoo

time15 hours ago

  • Business
  • Yahoo

Why Tom Lee says the odds favor a stock-market rally after the Fed decision

Happy Fed Day to all who observe, and at least one widely followed analyst says there's potential for market fireworks despite the 98.8% probability (according to futures markets) the central bank won't move interest rates. That analyst is none other than Tom Lee, the head of research at Fundstrat Global Advisors, whose enthusiasm for stocks generally extends to any day ending with the letter 'Y.' 'I'm at my wit's end': My niece paid off her husband's credit card but fell behind on her taxes. How can I help her? 'I prepaid our mom's rent for a year': My sister is a millionaire and never helps our mother. How do I cut her out of her will? Israel-Iran clash delivers a fresh shock to investors. History suggests this is the move to make. I'm 51, earn $129K and have $165K in my 401(k). Can I afford to retire when my husband, 59, draws Social Security at 62? Why Tom Lee says the odds favor a stock-market rally after the Fed decision Lee, like most everyone, isn't expecting the Fed to cut interest rates later on Wednesday. But he does make a notable case for why the market may react positively. 'We believe the Fed will acknowledge that inflation is undershooting their expectations. Recall the Fed has argued that tariff uncertainty causes them to be on hold. But incoming inflation has been soft,' says Lee. The consumer price index rose a scant 0.1% on a monthly basis in May. Import prices were flat. A real-time measure of import prices, updated through data last week, also has shown little pass through from tariffs to end prices. Market-based measures have fallen to the lowest level in a year, he adds. 'So we think Fed will have to acknowledge this. And we know there is a lot of partisan bias in the inflation consumer surveys,' says Lee. 'So markets likely realize Fed will have to relent eventually and return to a dovish bias.' Lee expects the stock market to return to all-tim highs (the S&P 500 was only 3% away anyway) — he said bitcoin is a leading indicator and the cryptocurrency achievved a record last week. He still has a 6,600 target for the S&P 500 by year end. Stock-market futures ES00 NQ00 were flipping between small gains and losses after an 0.8% retreat for the S&P 500 SPX on Tuesday. Oil CL00 edged higher. Key asset performance Last 5d 1m YTD 1y S&P 500 5982.72 -0.93% 0.71% 1.72% 9.03% Nasdaq Composite 19,521.09 -0.98% 1.98% 1.09% 9.29% 10-year Treasury 4.382 -4.50 -22.30 -19.40 15.50 Gold 3396.8 0.62% 2.42% 28.70% 44.90% Oil 72.63 6.34% 18.41% 1.06% -10.09% Data: MarketWatch. Treasury yields change expressed in basis points Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. At pixel time, the U.S. military still has not joined Israel's fight with Iran, which continued into Wednesday. Iran's supreme leader said the country would not surrender, replying to U.S. President Donald Trump's demand on Tuesday. The Fed decision — and importantly, the dot plot of interest-rate projections — is coming at 2 p.m. Eastern, with Fed Chair Jerome Powell's press conference at 2:30 p.m. Morgan Stanley's economists say they still expecting the dot plot to forecast two rate cuts this year. Weekly jobless claims dipped by 5,000 to 245,000, while housing starts tumbled 9.8% in May to an annual rate of 1.26 million. The Senate passed the stablecoin bill, which creates a regulatory framework for cryptocurrency tokens, and now goes to the House. Goldman ditches ban on SPACs as blank-check firms stage comeback. Jamie Dimon wants workers in the office. So why is he letting JPMorgan's European chief work remotely? The bigger picture from Bulgaria joining the euro Data on the U.S. economy is clearly deteriorating, says Neil Dutta, head of economic research at Renaissance Macro. This chart plots the decline in building material sales, which at a seasonally adjusted annual rate have tumbled 7.7% over the last six months. 'Recall that building material store sales represent an intermediate product that ultimately affects residential investment,' he says. Besides the retail sales report, Dutta also noted the New York Fed's service sector index points on ongoing contraction, industrial production fell for the second time in three months and home builder confidence fell to the lowest level since 2022. Here were the top stock-market tickers on MarketWatch as of 6 a.m. Eastern. Ticker Security name TSLA Tesla NVDA Nvidia GME GameStop PLTR Palantir Technologies AMD Advanced Micro Devices AAPL Apple TSM Taiwan Semiconductor Manufacturing AMZN MLGO MicroAlgo CRCL Circle Internet Group An Italian museum had a crystal-covered chair on display, and the inevitable happened. An 80-year old man tried driving down the famous Spanish Steps in Rome, and it didn't go well. This elderly dog, however, had more success taking on a wild bear. For more market updates plus actionable trade ideas for stocks, options and crypto, . I'm 75 and have a reverse mortgage. Should I pay it off with my $200K savings — and live off Social Security instead? 20 companies in the S&P 500 whose investors have gained the greatest rewards from stock buybacks Israel-Iran conflict poses three challenges for stocks that could slam market by up to 20%, warns RBC 'I'm 68 and my 401(k) has dwindled to $82,000': My husband committed financial infidelity and has $50,000 in credit-card debt. What now? 'It might be another Apple or Microsoft': My wife invested $100K in one stock and it exploded 1,500%. Do we sell?

Stock Market Today: Waiting on the Fed
Stock Market Today: Waiting on the Fed

Miami Herald

time2 days ago

  • Business
  • Miami Herald

Stock Market Today: Waiting on the Fed

Happy Fed Day! Will they or won't they? Actually, that's not really the question. The market is pricing in almost a 0% chance that the Federal Reserve moves on interest rates today. So, any move will be a huge surprise. The real question is what will the Fed say? About future moves, that is. Look for a statement from the Fed around 2 p.m. U.S. EDT today and a news conference with Chairman Jerome Powell 30 minutes morning's economic reports include initial jobless claims and housing starts. Jobless claims dropped to 245,000 for the week of June 14, below expectations of 251,000. While the beat is good, this is near the highest levels of the year and indicates a cooling job market. Housing starts were also below expectations, which in this case is not good. Starts were 1.26 million vs. a forecast of 1.36 million. Housing remains unaffordable for many Americans. So, how are markets reacting? Honestly, I think they're paying more attention to the Middle East and waiting for the Fed. Speaking of the Middle East, Iran's Ayatollah Ali Khamenei has said that he will not surrender to Israel. So, investors should not expect a quick end to this conflict. Futures are modestly higher this morning. S&P 500 futures are up 0.12%, while the tech-heavy Nasdaq is 0.2% higher. Bonds are rallying, too, although well off their highs of the day. The U.S. 10-year treasury note is up 0.04% and is priced to yield 4.38%. Crude oil continues tomarch higher on Middle East tensions. ThinkOrSwim Thought of the day: It's the reaction to news that matters. And when expected relationships change, it's important to understand why and what that means. Here, Timmer shows that typical "risk off" reactions to news have changed. The U.S. is looking less like the safe haven it has always been for investors. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.

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