The First Slice for Friday, June 24, 2022

U.S. stocks closed higher Thursday after Federal Reserve Chairman Jerome Powell concluded the second day of congressional testimony with a vow to battle inflation, even if it risks a recession. 

  • The Dow rose +194.23 or +0.64%
  • The S&P 500 rose +35.84 or +0.95%
  • The Nasdaq increased +179.11 or +1.62%

Stocks rose despite concerns about a potential sharp economic downturn as the Federal Reserve gets more aggressive in tightening monetary policy. Fed Chair Jerome Powell said Thursday he doesn’t think a recession is inevitable, but that he also has an “unconditional” commitment to fight inflation, in his second day of testimony to Congress on interest-rate policy.

Recent talk of recession has brought the yield on the 10-year Treasury down to 3.068% from as high as 3.48% earlier this month. Falling yields can help long-duration assets such as technology stocks and bitcoin which rose in early action on Thursday.

Only in the past three weeks have stocks begun to start discounting the risks of a meaningful slowdown, he said, adding that equities could have further to reprice, depending on how earnings, inflation and economic data shakes out in the year’s second half.

In economic data, new filings for unemployment benefits declined by 2,000 last week to 229,000 while remaining near a five-month high. It’s the latest sign that the U.S.’s red-hot labor market is finally starting to cool. 

U.S. private-sector activity saw a sharp slowdown in growth in June, a pair of surveys showed, as high inflation forced customers to cut back on orders and rising interest rates induced worries about a recession. 

The S&P U.S. services index fell to a five-month low of 51.6 in June from 53.4 in the prior month, based on a flash or preliminary survey. The U.S. manufacturing index, meanwhile, slid to a nearly two-year low of 52.4 from 57 in the prior month. A reading above 50 indicates expansion…….Full Loaf Hot Link[read more]

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