U.S. stocks hit session highs after Powell's press conference wraps up
The Federal Reserve cut rates 25 basis points today...
The Federal Reserve cut rates 25 basis points today and the market reacted with a collective yawn. Stocks and Treasuries kept their gains following the early afternoon decision, building on Wednesday's election-related surge to new record highs amid leadership from communication services and tech stocks.
Two inflation reports next week and a jobs report early next month will guide policymakers' thinking. And though Powell declined to discuss specific economic proposals from President-elect Trump, those might shape thinking over the longer run.
"Stocks continue to see post-election upside momentum," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research. "Stocks continue to push higher despite rising yields. Is there a level where equity markets begin to care?" Here's where the major benchmarks ended:
The S&P 500®index (SPX) rose 44.06 points (0.74%) to 5,973.10; the Dow Jones Industrial Average® ($DJI) fell 0.59 points (0.00%) to 43,729.34; and the Nasdaq Composite®($COMP) gained 285.99 points (1.51%) to 19,269.46.
The 10-year Treasury note yield (TNX) fell nine basis points to 4.34%, with most of the drop coming long before the Fed decision.
The CBOE Volatility Index® (VIX) continued its post-election plunge to 15.21.
The Federal Reserve on Thursday voted to cut its benchmark interest rate by quarter-percentage point to a range of 4.5%-4.75%. The move follows an outsized half-point cut in September.
The Fed is reducing rates to protect the labor market while keeping inflation on a cooling trend. In a statement, the Fed said it would assess the economic data when considering future easing.
Uncertainty over the path of Fed policy has risen since President-elect Donald Trump's victory on Tuesday.
Traders in the federal funds futures market now see a 33% chance of a pause at the Fed's next meeting in mid-December. Before Election Day, the odds were much smaller.
Diamondback Energy, the largest independent oil and gas producer in the Permian Basin, has warned that the U.S. shale industry may be repeating past mistakes of unsustainable growth. The company plans to limit its own output growth to 2% next year, emphasizing the need for financial discipline over aggressive production expansion.
Diamondback's CFO, Kaesa Van't Hof, cautioned that other companies' focus on lowering break-even costs to justify growth has "gotten this industry in trouble in the past" and may be leading the industry back down a problematic path. The broader shale sector is closely monitored, as rising U.S. production has put pressure on OPEC, leading the cartel to delay a planned production increase. Some producers, such as Matador Resources and ConocoPhillips, have already raised their production guidance, but Diamondback aims to prioritize free cash flow over capital expenditure growth.
Donald Trump has been elected as the next president of the US and updating...
Donald Trump has been elected as the next president of the US and updating tax, trade and energy policy will likely be priorities for the incoming administration, which will have a Republican majority in the Senate. Although the president-elect's immediate agenda is still taking shape, he has pledged to "terminate" Environmental Protection Agency rules targeting power plant pollution, end certain rules encouraging electric vehicle sales, ease LNG export permitting and take other steps to "unleash American energy" and address trade concerns.
The U.S. Energy Information Administration reported an...
The U.S. Energy Information Administration reported an inventory build of 2.1 million barrels for the week to November 1. EIA HERE
This compared with a modest inventory draw of half a million barrels for the previous week and a crude oil inventory build for the week to November 1 as estimated by the American Petroleum Institute on Tuesday.
The API also reported estimated fuel inventory draws for the week to November 1, and the EIA reported builds in gasoline and middle distillates.
In gasoline, the authority estimated an inventory increase of 400,000 barrels for last week, with production averaging 9.7 million barrels daily. This compared with an inventory draw of 2.7 million barrels for the previous week, when production averaged 9.7 million barrels daily as welly.
In middle distillates, the EIA reported an inventory build of 2.9 million barrels for the week to November 1, with production at 5.1 million barrels daily. These figures compared with an inventory drop of 1 million barrels for the previous week, when production averaged 4.9 million barrels daily.
The EIA also said imports last week stood at 6.2 million barrels daily, while refinery run rates averaged 16.3 million barrels daily. The numbers compared with an import rate of 6 million barrels daily for the previous week and a refinery run rate of an average 16.1 million barrels daily.
