“The next Fed action is more likely to be a cut next summer than another rate increase.” “The last of investors not convinced the Fed is done are likely ‘throwing in the towel’,” said Bryce Doty at Sit Fixed Income Advisors. Fed swaps indicate the odds of another hike have fallen to almost zero - with the market pricing in a 50 basis-point rate cut by July. While Wall Street’s rally could risk further easing of financial conditions - and ultimately complicate the Fed’s job - bets on a “pivot” next year have increased. Five-year yields plunged 24 basis points to 4.42 per cent.
Goldman Sachs Group Inc.’s basket of the most-shorted stocks beat the broader market in a sign some traders are preparing to cover bearish wagers. The Russell 2000 index of small caps added over 5 per cent. Stocks climbed while bond yields sank as an unexpected inflation slowdown bolstered bets the Federal Reserve’s aggressive hiking cycle is now over - and the next move will be a cut in mid-2024.Ībout 95 per cent of the S&P 500 companies rose, with the gauge up nearly 2 per cent.
