Wall Street slips after Jerome Powell sees strengthening economy, rising inflation

Jerome Powell, Chairman of the Federal Reserve Board, testifies during a House Financial Services Committee hearing on Capitol Hill in Washington, DC, February 27, 2018. (AFP)
Updated 27 February 2018

Wall Street slips after Jerome Powell sees strengthening economy, rising inflation

NEW YORK: Wall Street’s main indexes fell in choppy trading on Tuesday as US bond yields rose after new Fed Chairman Jerome Powell said the economy was strengthening and that inflation would rise.
Following his comments, traders of US short-term interest rate futures began pricing in a higher chance of a fourth rate hike this year, based on a Reuters analysis.
The benchmark US 10-year Treasury yields rose to a session high of 2.914 percent.
“Pretty much the market is going to be fluttering back and forth in both directions based on things he says today, so it doesn’t surprise me too much,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“It’s his first speech and the market is already in a higher volatility phase.”
In his prepared remarks, Powell had hinted that the central bank would stick to its current path of gradual rate hikes despite the added stimulus of tax cuts and government spending.
Powell’s testimony comes at a sensitive time for the market, which has swayed wildly in recent weeks on inflation fears.
Stocks have recovered much of their losses from the early February sell-off, when they shed more than 10 percent.
At 11:21 a.m. ET, the Dow Jones Industrial Average was down 20.34 points, or 0.08 percent, at 25,688.93, the S&P 500 was down 7.08 points, or 0.254713 percent, at 2,772.52 and the Nasdaq Composite was down 28.97 points, or 0.39 percent, at 7,392.50.
US cable giant Comcast offered to buy Sky for $31 billion in an unsolicited approach, taking on Rupert Murdoch’s Fox and Bob Iger’s Walt Disney in the battle for Europe’s biggest pay-TV group.
Comcast fell 5.2 percent, while Walt Disney dropped 3.1 percent and Twenty-First Century Fox 1.9 percent, dragging down the S&P consumer discretionary index.
In a big week for retail earnings, Macy’s reported higher-than-expected same-store sales growth for the fourth quarter. Its shares jumped 11 percent.
Fitbit slumped more than 10 percent after the wearable device maker forecast current-quarter results below estimates.
Luxury builder Toll Brothers’ shares rose 1.2 percent after it reported quarterly profit that beat analysts’ estimates as it sold more homes at higher prices.
Advancing issues outnumbered decliners on the NYSE by 1,595 to 990. On the Nasdaq, 1,434 issues rose and 965 fell.


Japanese officials cautious on prospects for US trade deal

Updated 17 September 2019

Japanese officials cautious on prospects for US trade deal

  • A long-sought trade pact with Japan was scrapped when Donald Trump withdrew the US from a pan-Pacific trade agreement shortly after taking office in 2017
  • Trump said he preferred that Washington and Tokyo strike a bilateral deal

TOKYO: Officials in Japan appeared wary over the prospects for a trade deal with the US after President Donald Trump said he was prepared to sign a pact soon.
Japan’s chief government spokesman, Yoshihide Suga, said Tuesday that the two sides are still finalizing details after reaching a basic agreement in late August on trade in farm products, digital trade and other industries.
Suga said Trump and Prime Minister Shinzo Abe are considering signing a deal in late September when they attend the UN General Assembly in New York.
“We are accelerating the work that still remains,” he said. “But I decline to comment further because we have not reached a formal agreement.”
Trump’s notice to Congress, released by the White House on Monday, did not mention tariffs on autos and parts, long a sticking point between the two countries.
It said his administration was looking forward to collaborating with lawmakers on a deal that would result in “more fair and reciprocal trade” between the two countries.
Toshimitsu Motegi, who became foreign minister last week after negotiating the deal as economy minister, said Japan must watch carefully to prevent Washington from forcing any last-minute changes, Kyodo News agency reported.
The agricultural minister, Taku Eto, cautioned against letting down Tokyo’s guard until the final agreement is reached, it said.
A long-sought trade agreement with Japan was scrapped when Trump withdrew the US from a pan-Pacific trade agreement shortly after taking office in 2017.
Japan and the other 10 remaining members of the trade pact, the Trans-Pacific Partnership, then renegotiated their own deal without the US
Trump said he preferred that Washington and Tokyo strike a bilateral deal.
That resurrected the longtime issue of tariffs on Japanese car and auto parts exports to the US and of stiffer duties on US exports of farm and other products to Japan.