On Friday, Wall Street closed lower as investors awaited insights from the Federal Reserve’s upcoming policy meeting regarding potential rate cuts. The S&P 500 recorded its second consecutive weekly decline, down 0.65%, while the Nasdaq Composite retreated 0.96%, and the Dow Jones Industrial Average lost 0.49%. Meanwhile, in Asia, the Bank of Japan will conclude its two-day policy meeting starting Monday, with speculation about whether the country will abandon its negative interest rate policy, the last of its kind globally.
The White House has urged the Senate to swiftly pass a bill concerning TikTok, which would compel Chinese tech firm ByteDance to sell the video-sharing app or face a ban in the United States. The legislation garnered strong bipartisan support in the House of Representatives last week, and President Joe Biden has signaled his willingness to sign it if approved by Congress.
The CEO of Hapag-Lloyd, one of the world’s leading ocean shippers, expressed optimism about global trade prospects for the year, citing depleted inventories and a post-Chinese New Year recovery. However, the company’s stock recently plummeted after it reported a significant decline in net profit for 2023 and reduced its dividend.
Amid the current tech industry landscape, recently laid-off tech workers are grappling with a pervasive sense of uncertainty. Job cuts in the sector have reached levels not seen since the dot-com crash, leading to a challenging job market where many individuals are forced to accept pay cuts. CNBC interviewed several affected individuals to shed light on their experiences navigating this difficult job market.
Goldman Sachs has adjusted its risk assessment for U.S.-China tensions impacting Chinese stocks, now rating it at 53 out of 100, indicating a relatively benign outlook for bilateral relations. The investment bank highlights the forthcoming U.S. election as a crucial factor influencing global asset markets, U.S.-China ties, and Chinese equity returns.
This week, all eyes will be on the Federal Reserve as Wall Street braces for potentially pivotal developments. Investors await signals from Fed Chair Jerome Powell and other officials regarding future rate cuts, with the central bank set to provide updates on rates, economic growth, inflation, and unemployment at its two-day meeting ending Wednesday. Recent data indicating persistent inflationary pressures has fueled speculation about the Fed adopting a more hawkish stance. While expectations for the timing and pace of rate cuts remain uncertain, Deutsche Bank predicts the first rate cut to occur in June, with the Fed possibly delivering a total of 100 basis points in reductions this year. However, the bank acknowledges the potential for more hawkish outcomes and irregularities in the timing and pace of rate adjustments, emphasizing the Fed’s data-dependent approach.
Investors are particularly keen to see if the Fed maintains its projection of three rate cuts for the year, with some economists suggesting a possible reduction to two. JPMorgan Chase CEO Jamie Dimon advocates for a cautious approach, urging the central bank to proceed slowly given inflationary pressures. Dimon emphasizes the importance of preserving the Fed’s credibility, suggesting a patient approach beyond June to assess evolving economic dynamics.