Home / Business / Inventories soar, optimism triggered by lower rates prolongs risk recovery

Inventories soar, optimism triggered by lower rates prolongs risk recovery



US stocks continued to advance on Friday, as risky assets continued to benefit from more accommodative communications from Federal Reserve officials.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The S & P 500 (^ GSPC) rose 0.14%, or 4.1 points, and reached a new all-time record of 3,004.29 points in a day. The Dow (DJI) increased by 0.29%, or 78.29 points, now more than 27,000 points. The Nasdaq (^ IXIC) climbed 0.21%, or 16.99 points. "data-reactid =" 16 "> The S & P 500 (^ GSPC) gained 0.14%, or 4.1 points, and hit a new all-time high of 3,004.29 in one day. Dow (^ DJI) up 0.29%, or 78.29 points, holding more than 27,000 points, the Nasdaq (^ IXIC) rose 0.21%, or 16.99 points.

Federal Reserve Chairman Jerome Powell boosted domestic stock prices this week. He made it clear to lawmakers that the central bank was about to lower interest rates in order to maintain the strength of the US economy in the face of increasing risks.

"The economy is in a very good position," Powell told the Senate Banking Committee on Thursday. "We want to use our tools to keep it there."

Other Fed speakers this week have been opposed to the idea of ​​a short-term rate cut in the context of a still strong economy in the United States. However, their comments contributed little to the market's expectations of lower rates until the end of the central bank meeting at the end of July. Futures on federal funds predict a 25-basis-point reduction in rates after the July meeting of 79.6 percent on Friday morning, with a 20.4 percent probability of a 50-point rate cut. based.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Head of the Atlanta Fed Raphael Bostic & nbsp;in a speech in Atlanta& nbsp; Thursday, downplayed the importance of economic stimulus by stating: "We are in a good position," in the Fed's dual mandate of securing maximum employment and stable prices. Richmond Fed President Thomas Barkin & nbsp;said Bloomberg& nbsp; Thursday, "I still feel pretty good in the economy," although the risks are "a little more downward." "data-reactid =" 20 "> Atlanta Fed chief Raphael Bostic in a speech Thursday in Atlanta Richmond Fed President Thomas Barkin told Bloomberg Thursday:" We are well placed Bloomberg said on Thursday: "I'm really happy with the economy," despite the risks of "a little more downside".

Traders are working on the floor of the New York Stock Exchange (NYSE). (Photo by Spencer Platt / Getty Images)

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Many Fed officials cited the trade dispute at several fronts a major risk for the economy.The signs of the impact of global trade tensions continued to increase, based on new data released on Friday.export growth has declined& nbsp; 1.3% in June compared to the previous year – less than consensus economists had predicted – while imports fell 7.3%, which is larger than expected. Imports from the United States fell 31.4% from last year, while exports to the United States fell 7.8%. "Data-reactid =" 32 "> Many Fed officials cited the multi-pronged trade dispute as a major risk to the economy, as China's export growth declined 1.3% in June compared with the previous year. in the previous year – less than economists expected – while imports dropped 7.3%, which is larger than expected Imports from the United States fell by 31.4% compared to last year, while exports to the United States decreased by 7.8%.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Other savings of slopes recorded readings disappointing for June, which marked the first full month of the entry into force of higher tariffs levied by the United States on Chinese goods worth $ 200 billion.Singapore's economy contracted by 3.4%& nbsp; between April and June compared with the previous quarter, on an annualized and seasonally adjusted basis, marking the largest quarterly contraction in about 7 years and clearly missing consensus expectations. "data-reactid =" 33 "> Other leading economies record disappointing results for June Singapore's economy, which depends on exports, recorded a contraction of 3.4% between April and June compared with the previous year. previous quarter, on an annualized and seasonally adjusted basis, making it the largest quarterly contraction market in about 7 years and clearly missing consensus expectations.

At the same time, Treasury yields maintained their gains after higher-than-expected inflation on US inflation via the consumer price index on Thursday which led to a decline in demand for government bonds in the US. long term. The 10-year yield rose 1.1 basis points to 2.131% at 7:41 am ET, a one-month high.

ECONOMY

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A measure of changes in producer prices in the United States has increased at a slightly faster pace than expected in June, according to a report & nbsp;Friday report from the Bureau of Labor Statistics"data-reactid =" 36 ">A measure of changes in producer prices in the United States has increased at a slightly higher rate than expected in June, according to a report released Friday by the Bureau of Labor Statistics.

The producer price index (PPI) rose 0.1% from June, which is in line with May's pace, and exceeds the expectations of consensus economists, who advocated a flat reading. Compared to last year, the main producer price index rose 2.3% in June, up from 2.1% forecast. The cost of energy and other goods declined during the month, while the service price index rose 0.4% in June, the largest increase since October 2018.

The non-price producer price index for food and energy, considered by many economists as a "fundamental" indicator to better capture underlying price changes, rose 0 percent. , 3% in June, a decline faster than expected 0.2%. Over the past year, producer prices excluding food and energy increased 2.3% from 2.1% forecast.

Excluding prices for food, energy and business services, the PPI remained stable in June compared with the previous month, after a 0.4% increase in May. Consensus economists were expecting a 0.2% increase for the month.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck"data-reactid =" 41 ">Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck

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