Strong September Retail Sales Put Fed's Next Move In Doubt: Interest Rate Cuts Are 'Not A Slam Dunk'
Portfolio Pulse from Piero Cingari
Stronger-than-expected September retail sales have sparked debate about the Federal Reserve's next interest rate move, with analysts reconsidering the likelihood of a rate cut in November. The retail sales data led to a rise in Treasury yields, impacting Treasury-related assets and stock market gains.
October 17, 2024 | 4:20 pm
News sentiment analysis
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POSITIVE IMPACT
The SPDR Gold Trust (GLD) rose 0.7%, reaching new all-time highs as investors sought safe-haven assets amid economic uncertainty.
Gold prices, and consequently GLD, tend to rise when investors seek safe-haven assets, especially amid economic uncertainty and rising yields.
CONFIDENCE 90
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
The Invesco QQQ Trust, which tracks the Nasdaq 100, rose 0.7% despite initial gains being tempered by rising Treasury yields.
While QQQ initially rose over 1%, the increase in Treasury yields likely dampened further gains, reflecting mixed investor sentiment.
CONFIDENCE 85
IMPORTANCE 50
RELEVANCE 60
NEGATIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) fell 1.5% as Treasury yields rose sharply following strong retail sales data.
The rise in Treasury yields directly impacts TLT, which tracks long-term Treasury bonds. Higher yields typically lead to lower bond prices, causing TLT to drop.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80