Economy

The Week Ahead: US Fed makes a decision on rates

The Week Ahead: US Fed makes a decision on rates”

Shares of the major banks, including Bank of America, Goldman Sachs and JPMorgan, rose more than 1 percent, helped by rising bond yields.

Boeing and Caterpillar rose more than 1 percent, providing the biggest boosts to the Dow, while Nvidia's near 5 percent increase pushed the Nasdaq higher.

"People are concerned about missing out as the market continues to rally", Phil Blancato, head of Ladenburg Thalmann Asset Management in NY, told Reuters. "We could be experiencing what's known as a robust return environment", said Ronald Sanchez, chief investment officer at Fiduciary Trust Company International in NY.

And the Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index, has been steady at 1.4 percent, while the core measure has been below the central bank's 2 percent target for more than five years.

Last week was the greenback's best against the Japanese currency since November, up 2.8 percent, as a rise in USA yields bolstered its appeal and data showing a pick up in US consumer prices helped rekindle expectations that the Fed could hike rates again in December.

FED WATCH: Investors looked ahead to this week's Fed policy meeting for indications on the timing of the next rate hike and when the Fed might start shrinking its multitrillion-dollar stockpile of bonds. Rate-sensitive sectors such as utilities were the weakest.

USA stocks eked out modest gains on Friday as geopolitical worries ebbed and disappointing data on retail sales, industrial output and consumer sentiment dimmed expectations for an interest rate increase by the Federal Reserve this year. The storms could make it harder for a few months to get a good read on growth and inflation, but the longer term trends are the same. It has raised rates three times since last December, twice this year.

Investors are expecting an announcement on the central bank's latest decision on monetary policy.

Futures on the S&P 500 Index were up 0.1 percent as of 7:19 a.m. Tokyo time.

In recent trading, the yield on the benchmark 10-year Treasury note was 2.220%, according to Tradeweb, compared with 2.202% Friday.

India's BSE Sensex 30 edged higher by 0.5 percent to ₹32,438.81, while Nifty 50 climbed 0.6 percent to ₹10,151.

Advancing issues outnumbered decliners on the NYSE by 1,611 to 1,202. It was 0.2 per cent higher on Monday.

The Fed has been seen as a stable influence in recent years, but that could change.

Last week, Canada's competition watchdog said it would not challenge a proposed merger between the two companies. The Nasdaq Composite .IXIC added 12.60 points, or 0.2 percent, to 6,461.06.

The country's PSEi Composite gained nearly 1.4 percent, hitting an all-time high of ₱8,294.14.

The double-whammy of Irma and Harvey could shave as much as 0.5 percent off of the U.S.' gross domestic product (GDP) in the third quarter as businesses are disrupted, energy prices rise and hiring weakens.

U.S. Treasury releases worldwide money flows data for July. CAC 40 of France were closed for the day.



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