Illustration by Michael Haddad
Those moves are relatively small, and should e expected after the Dow gained more than 600 points following Federal Reserve Chair Jerome Powel’s dovish speech yesterday. More worrisome is the response of oil, which dropped 1.1% to $49.76, and in the 10-year Treasury yield, which briefly fell under 3% in overnight trading. And those moves could signal something darker—continued concerns about the global economy.
“Clearly, with the Fed thinking about slowing down their hiking schedule and the ECB expressing similar thoughts of delaying tightening in the Eurozone, a lower-than-previously-expected interest rates environment is positive for equities,” writes Konstantinos Anthis, head of research at ADSS. “However, the prospect of a slowing domestic performance in the U.S. and Europe and persisting trade concerns on a global level don’t allow for much optimism so we still remain on the defensive regarding the U.S. and European equity markets.”
Write to Ben Levisohn at [email protected]