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Powell’s Tightrope Act: Federal Reserve Winks at Rate Hike Expectations Despite Market Blues

In a classic tango between expectation and reality, the Federal Reserve’s members sprang into action on Tuesday, dampening hopes that the era of rate hikes had met its demise. The stage is now set for Fed chairman Jerome Powell to potentially throw a hawkish curveball against the recent loosening of financial conditions.

Federal Reserve Governor Michelle Bowman led the charge, reminding eager market players that assumptions of the Fed keeping rates unchanged were a tad premature. The flurry of comments reignited a flicker of hope among investors for potential rate hikes. However, with many still clinging to the notion that the Fed’s hiking spree has wrapped up, Treasury yields found it challenging to shake off their recent gloom, lingering in the aftermath of the Fed’s decision to maintain rates last week and Powell’s notably dovish press conference on November 1.

The odds of a rate hike in the upcoming December and January meetings are currently dismal, standing at a meager 10% and 15% respectively, according to Investing.com’s Fed Rate Monitor Tool.

The pressing question now looms over Jerome Powell’s shoulders: will he combat these expectations? The Fed’s overarching message revolved around deciphering why Treasury yields are spiraling upward. If these escalations in yields primarily hinge on predictions of the Fed’s next move, they might not necessarily align with the Fed’s forward-looking policy considerations.

Powell’s upcoming stance remains the market’s mystery, as the tug-of-war between expectations and Fed action continues to shape the narrative of future rate hikes. The stage is set, the players are in motion, and the spotlight remains fixed on the enigmatic Fed chairman.

Dow higher as tech reigns supreme to help extend win streak

U.S. stocks ended higher Tuesday, notching a seven-day win streak underpinned by strength in big tech as Treasury yields fell despite Federal Reserve members signaling that rate hikes remain on the table.

At 6:00 ET (21:00 GMT), The Dow Jones Industrial Average was up 56 points or 0.2%, notching its longest winning streak since July.  The NASDAQ Composite was up 0.90%. The S&P 500 was up 0.3% and notched its seventh straight win, its longest winning streak since November 2021.

Treasury yields retreat despite fading optimism over peak rates as Fed speak continues

United States 10-Year fell as investors continue to digest remarks from Fed speakers that point to the possibility of further rate hikes ahead.

Fed governor Governor Michelle Bowman said Tuesday she continues to expect that the Fed “will need to increase the federal funds rate further to bring inflation down to our 2 percent target in a timely way.”

Focus will shift to Fed Chair Jerome Powell, who is slated to deliver a speech on Wednesday and Thursday. Futures markets expect the Fed to hold rates steady again at its December meeting.

The move lower in yields helped lift tech stocks including Apple Inc (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms (NASDAQ:META), more than 1% higher.

Uber, DataDog impress on earnings stage

Uber Technologies (NYSE:UBER)’s weaker-than-expected quarterly earnings were overshadowed by stronger-than-expected gross bookings, the value of transactions on its app. Its shares rose nearly 4%.

Datadog Inc (NASDAQ:DDOG) surged 28% after the cloud infrastructure lifted its annual guidance and reported third-quarter results that topped Wall Street estimates.

WeWork files for bankruptcy

Additionally, work space provider WeWork (NYSE:WE), which was valued at $47B, has filed for bankruptcy in a New Jersey court, as it grapples with a post-pandemic downturn in office occupancy and expensive leases. Shares were halted.

Crude sinks on weak Chinese trade data

Oil prices fell sharply Tuesday, dropping to over two-month lows, after the disappointing trade data from China raised concerns over sluggish demand in the world’s largest oil importer.

Chinese exports fell more than expected in October amid worsening overseas demand, while an unexpected rise in imports saw China’s trade surplus shrink to its worst level in 17 months.

This prolonged weakness in exports could stymie growth in the country going forward and thus dent oil demand.

Both contracts have slumped over the past week, amid growing expectation that the Israel-Hamas war will not disrupt supply in this oil-rich region.

 

Source: Investing.com

Upwork (NASDAQ: UPWK) Surfs High on Waves of Success, Riding an 18% Surge After Revealing Stellar Q3 Figures

Upwork, the online freelance marketplace, set Wall Street abuzz as its stock catapulted over 18% in after-hours trading. What’s the secret to this soaring success story? Well, the company didn’t just meet expectations; it blew them out of the water, reporting an impressive EPS of $0.21, sailing past the estimated $0.10.

But that’s not all—revenue painted an equally impressive picture, leaping up by 11% from the previous year to hit $175.73 million. This leap was no accident; it was a result of smart strategies. Take rates expanded, fueled by the stellar performance of Upwork’s advertising products and a clever move to a simplified, flat-fee pricing structure in 2023. This bold step propelled the revenue hike, making investors cheer.

Adding more fuel to this rocketing success, the number of active clients didn’t just grow, it thrived. Upwork saw a steady 2% increase in active clients, both year-over-year and quarter-over-quarter, hitting a robust number of approximately 836,000.

It seems Upwork didn’t just show up to play; they brought their A-game, surpassing expectations and leaving a significant mark on the market.

Midweek investing is like finding a hidden gem in the middle of the week – it’s that ‘aha!’ moment when you realize the market’s potential is not just a Monday rush or a Friday finale, but a juicy opportunity smack dab in the middle. It’s the midweek magic where your investments might just pull a Wednesday surprise, turning the hump day into a jackpot day. Who said all the fun had to happen on weekends?