Fed is watching several key market indicators to determine timing and level of rate changes. The CPI rose considerably above forecasted levels in January and that fueled fears of a dangerous spike in inflation. US 10-year Treasury notes rose to a four year high of 2.92% following CPI report. Same report prompted J P Morgan to lower GDP estimate for the first quarter. Higher interest rates are driving down demand for mortgages.
Losses were led by Chinese markets overnight, with Shanghai tanking 4.2% and Hang Seng down more than 3%, while Europe also posted a sea of red. Stocks took cues from a slump in U.S. equities, which plunged in the previous session and saw the DJIA tumble by over 1,000 points into correction territory. While many are still trying to pin an exact reason to the selloff and wild swings, U.S. futures may be helped by the overnight efforts to avoid a government shutdown.
U.S. stock funds saw a record $23.9B withdrawn by investors during the most recent week, marking their largest withdrawals on record, according to Lipper. Records from the Thomson Reuters unit date back to 1992. Exchange-traded fund outflows constituted the bulk of withdrawals, at $21B, while mutual fund outflows made up about $3B of withdrawals.
Just hours after the government stumbled into another shutdown, Congress passed a budget agreement early Friday that would extend the current level of federal funding until March 23. The bill would also bump limits on defense and non-defense spending by about $300B over the next two years. It will now be sent to President Trump for his signature, ahead of the market open.
Trump Nominates Tax Lawyer To Run The IRS: The White House announced Thursday that President Donald Trump will nominate Charles Rettig, a California tax lawyer, to run the Internal Revenue Service. Mr. Rettig, if confirmed by the Senate, will face a number of challenges at the agency. With the new tax law kicking in this year, the IRS needs to update forms, create new definitions, write regulations and field questions from taxpayers, which tend to increase when rules change.
Amazon reportedly launching a delivery service for businesses; FedEx, UPS shares slide. Wall Street Journal Reported Friday that Amazon is gearing up to launch a delivery service for business, the service will be called “Shipping with Amazon” and will see the tech giant picking up packages from businesses and delivering them to customers.