Greg Wilensky's Perspective
Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors, argues that the current probability of a rate cut is still too low. In an email, he stated, "We still believe that a 25-basis point reduction to the policy rate is extremely likely. The odds of a cut are still higher than the 70% currently implied in the futures market." Wilensky believes that a combination of a very strong NFP (nonfarm payrolls) print and a higher than expected core CPI release is needed to cause a pause at the December meeting. 1: Wilensky's analysis is based on his in-depth understanding of the economic landscape. He closely monitors various economic indicators and believes that the current data does not fully reflect the need for a rate cut. His expertise in fixed income markets gives him valuable insights into the potential impact of rate changes on different asset classes. 2: By emphasizing the importance of specific economic data points, Wilensky is highlighting the complexity of forecasting policy rates. The interaction between different economic factors makes it difficult to predict with certainty the direction of interest rates. However, his view suggests that there is still a significant chance of further rate cuts in the near future.The Difficulty in Forecasting Policy Rates
Wilensky also pointed out that the path for policy rates over the next year is more challenging to predict. The economy and markets will be influenced by governmental policy decisions not only in the U.S. but also around the world. These external factors add an additional layer of uncertainty to the already complex task of forecasting interest rates. 1: The global nature of the economy means that events in one country can have ripple effects on others. For example, changes in trade policies or geopolitical tensions can impact economic growth and inflation, which in turn affect interest rate decisions. Wilensky's recognition of this global interdependence is crucial in understanding the potential trajectory of policy rates. 2: Additionally, internal factors such as domestic fiscal policies and consumer sentiment also play a significant role in shaping the economic outlook. Wilensky's expertise allows him to consider these various factors and provide a more comprehensive analysis of the future path of policy rates.The Market's Pricing and Treasury Curve Outlook
With the market pricing in a little less than 75 basis points of easing by the Fed over the next year, Wilensky believes that the odds favor more cuts. This has a positive impact on the short to intermediate part of the U.S. Treasury curve. 1: The pricing of interest rate futures reflects the market's expectations and sentiment. A lower probability of a rate hike and a higher probability of a rate cut can lead to a flattening or even an inversion of the Treasury curve. Wilensky's view suggests that the market is anticipating a more accommodative monetary policy in the coming months. 2: The implications of a more dovish monetary policy for the Treasury market are significant. Lower interest rates can stimulate borrowing and investment, which can have a positive impact on economic growth. However, it also poses challenges for fixed income investors who rely on higher yields. Wilensky's analysis helps investors navigate these complex market dynamics.Unraveling the Dynamics of Dow Jones Futures and the Stock Market
Overview of Dow Jones Futures Today
Dow Jones futures saw a slight increase compared to fair value. S&P 500 futures remained flat, while Nasdaq 100 futures edged lower. It's important to note that the U.S. stock market will be closed on Thanksgiving Day, but other exchanges around the world will be open. Dow futures will trade as usual, and U.S. stock exchanges will close early on Friday at 1 p.m. ET. It's crucial to remember that overnight action in Dow futures doesn't always translate into actual trading in the next regular stock market session.
This provides an interesting perspective on the market's behavior and how different indices are performing. It shows the complexity and volatility of the stock market, even during holiday periods.
The Stock Market Rally
The stock market rally had a somewhat weak session, with weak tech earnings and ongoing Nvidia woes contributing to the preholiday selling. Despite this, the key indexes are still up for the week and close to all-time highs. The Dow Jones Industrial Average sank 0.3%, the S&P 500 index declined 0.4%, and the Nasdaq composite retreated 0.6%. However, the small-cap Russell 2000 managed to edge up 0.1% but finished well off its highs.
This shows the resilience of the market and how different sectors are performing. It also highlights the importance of analyzing individual stocks and sectors within the context of the overall market.
Nvidia Stock
Nvidia stock fell 1.15% to 135.34, but managed to avoid closing below its 50-day moving average for the first time in two months. The stock had sunk as low as 131.80, briefly undercutting a short-term low and coming close to an automatic sell rule from the 140.76 buy point.
This indicates the volatility and uncertainty in the market, especially for high-profile stocks like Nvidia. It shows how even a strong company like Nvidia can face challenges and experience price fluctuations. Investors need to be vigilant and follow sell rules to protect their investments.
What To Do Now
The stock market rally is performing well, with a broad-based advance. Small and midcap stocks are leading the way, along with financials, homebuilders, and several nontech stocks. Nvidia and other chip plays are struggling, as are software names.
Investors need to be flexible and follow what's working in the market. Running screens can be helpful in filtering out biases and identifying actual leading stocks and sectors. It's important to make incremental buys or add-on purchases and cut losers and laggards. Letting your portfolio work for you is key.
Reading The Big Picture every day can help investors stay in sync with the market direction and leading stocks and sectors. This provides valuable insights and helps investors make informed decisions.
Unlock New Investment Opportunities with Binance's THE Addition
Earn with THE
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Convert with THE
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Margin Trading with THE
Binance Margin will add THE as new borrowable assets on Cross and Isolated Margin, as well as the THE/USDT pair on Cross and Isolated Margin at 2024-11-27 12:00 (UTC).Margin trading allows users to leverage their positions and potentially increase their returns. The addition of THE as a borrowable asset provides more options for margin traders.
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Futures Trading with THE
Binance Futures will launch the USDⓈ-M THE Perpetual Contract at 2024-11-27 12:15 (UTC), with up to 75x leverage.The launch of the USDⓈ-M THE Perpetual Contract offers traders the opportunity to speculate on the price movement of THE in the futures market. The high leverage allows for potentially significant profits.
However, it's crucial to manage risk carefully when trading futures. Binance provides detailed information on the contract specifications and risk factors to help users make informed decisions.
Please note that the maximum funding rate of the THEUSDT Perpetual Contracts at launch is +2.00% / -2.00%, and the funding fee settlement frequency is every four hours. Binance reserves the right to adjust the specifications of the contracts based on market conditions.
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The THEUSDT Perpetual Contracts are subject to the Binance Terms of Use and the Binance Futures Service Agreement, ensuring a secure trading environment.
Thank you for your support! Binance Team
Note: This announcement was amended on 2024-11-27 to clarify that the ticksize for THEUSDT is 0.0001.
Trade on-the-go with Binance’s crypto trading app (iOS/Android) and find us on various platforms. Binance reserves the right to amend or cancel this announcement at any time without prior notice.
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Digital asset prices are subject to high market risk and price volatility. The value of your investment may go down or up, and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance is not liable for any losses you may incur. Past performance is not a reliable predictor of future performance. You should only invest in products you are familiar with and where you understand the risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice.