Dow poised for record high as stocks rise ahead of Fed decision

Live4 updates

• 

  Tuesday 17 September 2024 at 16:00 GMT+2

  Homebuilder confidence rises in September ahead of expected rate cut

  Homebuilders are feeling more confident about the housing market as mortgage rates are at their lowest level since February 2023.

  The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose two points to 41 in September from the previous month, snapping a streak of four consecutive monthly declines.

  September’s figure was in line with economists’ estimates of 41, according to Bloomberg data.

  “Thanks to lower interest rates, builders now have a positive outlook on future new home sales for the first time since May 2024,” NAHB President Carl Harris, a Wichita, Kan.-based custom homebuilder, wrote in a press statement.

  Mortgage rates have fallen in recent months, hitting their lowest level in more than a year as investors anticipate rate cuts from the Fed this month. The central bank will issue its next policy decision on Wednesday.

  Lower mortgage rates benefited builders as they withdrew from concessions. The survey found that 32% of builders cut home prices to support sales in September, compared with 33% in August, and that the average price cut was 5% – the lowest since July 2022.

  The six-month sales outlook indicator, meanwhile, rose 4 points to 53. The prospective buyer traffic indicator and the NAHB index of current selling conditions also both rose two points and one point respectively .

• 

  Tuesday, September 17, 2024 at 15:58 GMT+2

  Thoughts from Dreamforce

  We’re greeting you once again from San Francisco, this time from the big annual Salesforce (CRM) meeting known as Dreamforce. I think this is my fifth Dream Force and I have to say that each one is more surprising and different than the last.

  Take my experience last night.

  I’m sipping a water during cocktail hour (hey, it’s a work night) at the Time AI 100 dinner (note: Time is owned by Salesforce CEO Marc Benioff and his wife Lynne) and see Dr. Lisa Su, CEO- ul AMD (AMD), standing. in the corner with her husband. So of course I go and say hello and start a conversation.

  Somewhere in the convo I mention that I need to quit work and go back to school to learn more about AI. She advised me against it, recognizing that technology moves so fast that the industry is learning on the fly in many ways.

  This left me concerned about the safety of AI (something further amplified during the discussions we had at the table) and the impact on jobs of this rapidly advancing technology. But it also reinforced the idea that even a year from now, many companies across industries will see big margin gains as AI spreads internally through their workflows.

  The question I wonder is whether the market has priced all of this into the stock.

  However, below is what Su told me last week about the future of AI at the Goldman Sachs technology and media conference.

• 

  Tuesday, September 17, 2024 at 15:40 GMT+2

  Retail sales beat Wall Street estimates in August

  Retail sales beat Wall Street estimates in August as investors keenly watched for any sign of a slowdown in consumer spending. The data comes as the Federal Reserve’s two-day policy meeting begins in Washington, with the central bank widely expected to cut interest rates as data on economic growth slows and inflation eases.

  Retail sales rose 0.1% in August. Economists had expected a 0.2 percent drop in spending, according to Bloomberg data. Meanwhile, July retail sales were revised up 1.1 percent from a previous reading that showed sales rose 1 percent in the month, according to Census Bureau data.

  “Stronger-than-expected retail sales data for August suggest that, buoyed by rapid wealth gains and lower energy prices, consumers continue to spend freely despite a slowdown in the labor market,” wrote Capital Economics North America economist Olivia Cross in a note to clients on Tuesday. .

  The announcement comes as investors widely expect the Fed to cut interest rates for the first time since 2020 when its next policy decision is announced at 2 pm ET on Wednesday.

  “I don’t think it really changes anything,” BofA Securities senior U.S. economist Stephen Juneau told Yahoo Finance. “It’s kind of a non-event.”

  On Tuesday morning, markets were pricing in a 67 percent chance the Fed would cut interest rates by 50 basis points, compared to a 33 percent chance the Fed would opt for a cut of less than 25 basis points, according to CME’s FedWatch tool.

• 

  Tuesday, September 17, 2024 at 15:31 GMT+2

  Stocks open higher ahead of key Fed decision

  Stocks rose on Tuesday with technicals leading the advance as investors weighed fresh data on retail sales ahead of a Federal Reserve meeting crucial to interest rate cuts.

  The Dow Jones Industrial Average (^DJI) rose about 0.2 percent, hitting a record close for the blue-chip index. The S&P 500 (^GSPC) added about 0.4%, while the Nasdaq Composite (^IXIC) rose 0.7%.