Is the Federal Reserve turning hawkish? Morgan Stanley: I have seen this episode!
Morgan Stanley stated that the timing and magnitude of interest rate cuts depend on the implementation progress of the restrictive policies of the new Trump administration. However, the impact of these policies on economic activity may also be delayed. Therefore, while the Federal Reserve is currently hawkish, it may turn dovish later.
Why did the U.S. stock market rebound significantly? It comes from the key statements of this dovish Federal Reserve member.
Previously, he hinted that there might be a slowdown in the pace of interest rate cuts in 2024, which once sparked a reduction in market expectations for interest rate cuts next year. After seeing the latest inflation data, his recent remarks reaffirmed support for interest rate cuts, which undoubtedly provided a boost to the market.
Musk stands for the far-right party in Germany, which is criticized as interfering in the German election.
The Alternative for Germany (AfD) was established in 2013 and opposes European integration and the EU, as well as immigration. The domestic intelligence agency in Germany has listed the AfD as a suspected extremist organization.
Dominant market "narrative": Powell VS Trump.
After the Federal Reserve announced its interest rate decision, the U.S. stock market nearly erased all the gains since Election Day, reflecting a divergence in market narratives: last month's surging "Trump narrative" has cooled down, while the Federal Reserve's "hawkish" stance has shifted market focus back to inflation factors.
The Federal Reserve's "third-in-command": It is expected that interest rates will continue to be cut in the future, and the impact of Trump's policies has begun to be considered.
①Williams stated that he expects the Federal Reserve to implement more interest rate cuts, but the decision on rate cuts will depend on subsequent data, as monetary policy still suppresses economic growth momentum; ②Williams acknowledged that the impact of Trump's policy agenda has begun to influence his economic outlook.
The "farce" of the USA government shutdown crisis is over! The Senate has passed a stopgap spending bill.
The bill ensures that the USA federal government continues to receive operational funding, extending the funding period from this Friday night to mid-March next year.
Express News | The U.S. Senate voted to pass an emergency funding bill to prevent a government "shutdown", which will provide operating funds for the USA government until next March.
Express News | White House spokesperson: The USA government's budget office has stopped the shutdown and is preparing work.
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38 Republican "traitors", the USA government nearly faced a shutdown, was Trump's "strong stance" exposed?
Analysis suggests that this event indicates that Trump, who seems to have "consolidated power" and appears politically stable, now faces an uncertain future. Trump's Republican colleagues, 38 Republican representatives in the House, opposed his call to "suspend or eliminate the debt ceiling," which almost led to a government shutdown.
The only official who voted against the rate cut at the Federal Reserve's December meeting explains why they do not support the rate cut.
Federal Reserve Chair Hammack indicated that based on her determination that monetary policy is currently close to a neutral stance, she tends to keep policy stable until more evidence shows that inflation is returning to the target path of 2%. The momentum of the USA economy and the recent high inflation data prompted her to raise the inflation forecast for next year. She believes her decision is a tough choice.
On the last day of the OpenAI live broadcast, the "big reveal" was made: the next generation inference model o3 made its debut!
① OpenAI placed its most important cutting-edge product on the last day of a 12-day technology sharing live event! ② On Friday, OpenAI released the next-generation reasoning model o3, which is an upgraded version of the o1 reasoning model released earlier this year; ③ OpenAI claims that, at least under certain conditions, the o3 model can come close to achieving AGI.
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Multiple Federal Reserve officials support relying on data for cautious interest rate cuts next year, while Powell's "dovish allies" rarely make hawkish statements.
Analyses have pointed out that although San Francisco Fed Chair Daly and New York Fed Chair Williams both acknowledge that interest rate cuts will continue next year, they also stated that there is no rush to lower rates. All Federal Reserve officials emphasized the importance of data and acknowledged the uncertainty in the outlook. However, the Chicago Fed President, who will be a voting member next year, made more dovish comments, believing that inflation is still cooling and that interest rates need to be significantly lowered within a year and a half, which boosted U.S. stocks to open low and rise high while Treasury yields fell.
"Triple Witching Day" caused a huge shock in the U.S. stock market! Short sellers covered their positions, driving a sharp rise during trading, but market volatility may continue next week.
Analysis suggests that on Friday, the US stock market opened with a rebound because the US government shutdown crisis may actually help ease concerns over the Federal Reserve no longer cutting interest rates. Additionally, as short positions were excessively squeezed in the past few trading days, the market's reversal led to a furious short covering that accelerated the rebound. However, the expiration of a large number of Call Options, the approaching holiday, and the risk of a US government shutdown further increased market uncertainty, and fluctuations may continue into next week.
In a last-ditch effort to avoid a government shutdown: The U.S. House of Representatives voted to pass a short-term spending bill, submitting it for a vote in the Senate.
The bill to maintain government short-term spending until March of next year has removed the debt ceiling provisions and will be voted on in the Senate. If a relevant short-term spending bill is not passed by 12:01 AM local time on Saturday, the federal government will partially shut down, forcing hundreds of thousands of federal workers to take leave.
Top 20 by transaction volume | Palantir is bullish on by UBS Group, with the stock price soaring over 8%, reaching a record closing high.
On Friday, the most traded stock on the U.S. market was Tesla, which closed down 3.46%, with a total transaction of 55.697 billion dollars; the second was NVIDIA, which closed up 3.08%, with a transaction of 39.459 billion dollars; and the seventh was Palantir, which closed up 8.54%, reaching a record high at closing, with a transaction of 22.016 billion dollars.
U.S. stocks closed | "Triple Witching Day" saw a major rebound in U.S. stocks! All three major Indexes rose by over 1%; the AI application Concept exploded, with Palantir rising over 8%.
Ed Yardeni, the most accurate Analyst on Wall Street and president of Yardeni Research, is optimistic about the U.S. stock market, predicting that the S&P 500 will reach 7,000 points next year and 8,000 points the year after.
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Invesco QQQ Trust Options Spot-On: On December 20th, 5.59 Million Contracts Were Traded, With 11.43 Million Open Interest
On December 20th ET, $Invesco QQQ Trust(QQQ.US)$ had active options trading, with a total trading volume of 5.59 million options for the day, of which put options accounted for 53.15% of the total