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Traders spooked by Wednesday’s hotter-than-expected inflation print need not to worry, according to Jefferies’ David Zervos, who says risk assets can thrive with or without interest rate cuts by the Federal Reserve.The S&P 500 Index dropped more than 1% Wednesday after the latest consumer price index topped economists’ forecasts, renewing concerns that the Fed will delay any cuts. The technology-heavy Nasdaq 100 Stock Index slumped 1.2% as Treasury yields soared to a fresh year-to-date high near 4.5%.However, US equities are likely to continue their uptrend based on good economic news, which Zervos, the bank’s chief market strategist, expects to swamp discussions about keeping rates higher for longer.Continued strength in US economic data and signals from the Fed that there’s no rush to ease monetary policy have prompted investors to recalibrate their expectations for the timing and frequency of interest rate cuts. After Wednesday’s inflation reading, traders are now signaling that they anticipate policymakers dialing back rates just twice this year starting in September.Zervos said market expectations at the start of 2024 for six cuts by December was “almost as silly” as pricing in two cuts at the start of last year.While he sees hefty cuts as wishful thinking, he also argues that policy is still less restrictive than traditional measures. He points to the Fed’s balance sheet as a sign “the stimulative vestiges of quantitative easing are still with us.”“The market has been predicting doom on the economy because of high rate levels for a very long time,” Zervos wrote. “The missing link for the true economic storyline has been stimulative central bank balance sheets.”Minutes from the Fed’s last policy meeting released Wednesday also showed that policymakers “generally favored” slowing the pace at which they’re shrinking the central bank’s asset portfolio by roughly half.Moreover, Zervos said the market appears confident the Fed won’t lose control of inflation, pointing to the so-called breakeven rate on five-year, five-year forwards, an indicator of future inflation pressure, which he noted was hardly moving.“Risk assets should stabilize here and resume their uptrend as good news on the economic growth front will dominate the headwinds from a Fed that needs to stay a little higher for a little longer to fully anchor long-run inflation expectations,” Zervos said. He praised Fed Chair Jerome Powell for pushing back against cutting interest rates last year.“He looks more than vindicated today in his hawkish wait-and-see stance,” Zervos said, adding that former Fed Chair Paul Volcker “would be proud.”

New York: US stocks fell Wednesday on worries that what seemed like a blip in the battle to bring down inflation is turning into a trend. The S&P 500 was 1.2% lower in a wipeout where nine out of 10 stocks in the index fell. The Dow Jones Industrial Average was down 514 points, or 1.3%, as of 11:45 a.m. Eastern time, and the Nasdaq composite was 1.2% lower.Treasury yields also leaped in the bond market, raising the pressure on the stock market, after a report showed inflation was hotter last month than economists expected. It's the third straight report to suggest progress on bringing high inflation down may be stalling."There are still embers of inflation here and there in the economy," said Joe Davis, chief global economist at Vanguard.For shoppers, that's painful because of the potential for even higher prices at the store. For Wall Street, that's painful because it could convince the Federal Reserve to hold back on delivering the cuts to interest rates that traders are craving and have been betting on.The S&P 500 had already leaped more than 20% since Halloween in part on expectations that the Federal Reserve would lower its main interest rate, which is sitting at its highest level in more than two decades. Such cuts would relax the pressure on the economy and encourage investors to pay higher prices for stocks, bonds, cryptocurrencies and other investments.But the Fed has been waiting until it saw more evidence inflation was heading sustainably down toward its goal of 2%. After an encouraging cooling last year, the fear now is that inflation may be stuck after January's, February's and March's inflation reports all came in hotter than expected, along with data on the economy generally."Two data points don't make a trend, but maybe three do," said Brian Jacobsen, chief economist at Annex Wealth Management."If we get one more reading like this, Fed chatter will shift from when to cut to whether to hike."Prices for everything from bonds to bitcoin to gold fell .Traders sharply cut back on bets that the Fed could begin cutting rates in June. They now see less than a 19% chance of that, down from nearly 74% a month ago, according to CME Group.

Sensex’s 5,000-point journey to 75,000 took just 80 days, fuelled by a mix of foreign and domestic institutional flows. Though the last 5,000-point rally would have been one of the fastest in Sensex’s history, index moves of older periods based on points may not be strictly comparable with the latest changes because of the differences in the statistical impact of the base effect. The Sensex took 27 years to breach the 10,000-mark for the first time in February 2006, while it gained the next 10,000 points in just 22 months as a flood of fresh foreign flows drove stock prices higher at a faster pace. The progress from 20,000 to 30,000 was marked by significant volatility and challenges, spanning over a decade. 109210238The subsequent rise from 30,000 to 40,000 unfolded smoothly within two years with the index reaching 50,000 in under two years amid the global pandemic. In terms of valuations, the Sensex is currently trading at 25 times its trailing 12-month earnings, compared to 28 times when the index stood at 40,000 and 34 times at the 50,000 level.

WASHINGTON - Top figures from business, sports and politics - including an ex-president - turned up for Wednesday's state dinner honoring Japanese Prime Minister Fumio Kishida as the White House served up its maximum dose of pomp to honor a close U.S. ally. Bill and Hillary Clinton were on familiar turf for the event, the former president declaring it "feels great" to be back before casting an appreciative eye at a portrait of his wife from her first lady days that was on display nearby. Guests in bright spring colors and lots of shimmery gowns chatted politics and talked shop as they strolled in - that meant eclipse chatter from NASA Administrator Bill Nelson ("fabulous" view in Ohio!) and an assessment of President Joe Biden's electoral prospects in Wisconsin from Gov. Tony Evers (looking good!). But on a day when the inflation news from Washington was less than encouraging, Fed Chairman Jay Powell shot past without stopping to chat. Olympic figure skater Kristi Yamaguchi, in a purple gown, said she didn't expect to be out campaigning for Biden but nonetheless seemed bullish on his reelection. Actor Robert DeNiro supplied the Hollywood quotient for the night. On a warm spring evening, the Bidens came outside on the North Portico to welcome Kishida and his wife, Yuko, who stood out in a flowing royal blue gown on the red carpet. Inside, Jill Biden, wearing a beaded sapphire gown, had transformed the State Floor of the White House into what she called a "vibrant spring garden" for the evening. The floor of the famous Cross Hall was decorated with images giving the nearly 230 guests the feel of walking over a koi pond, a nod to fish that symbolize "friendship, peace, luck and perseverance," the first lady said at a media preview Tuesday. A state dinner is a tool of U.S. diplomacy, an honor doled out sparingly and only to America's closest allies. In the case of Japan, the president has granted that honor for just the fifth time to an ally that he sees as a cornerstone of his policy toward the Indo-Pacific region. Kishida is on an official visit to the United States this week. The state dinner is Biden's first this year. The guess included plenty of Biden family members, including granddaughter Naomi and her husband, Peter Neal. There were also business moguls in force, including JP Morgan Chase CEO Jamie Dimon, Apple CEO Tim Cook, Amazon founder Jeff Bezos, as well as labor luminaries UAW chief Shawn Fain and United Steelworkers President David McCall. Both unions have endorsed Biden for reelection. Dry-aged rib eye steak, cherry blossoms and the music of Paul Simon are also part of the evening. Guests will dine on a meal that was designed to highlight the "bounty of spring" in Japan and the United States: a first course of house-cured salmon that was inspired by a California roll and an entree of dry-aged rib eye steak with shishito pepper butter, fava beans, mushrooms and onions. Dessert is salted caramel pistachio cake with a matcha ganache and cherry ice cream. Some of Jill Biden's favorite flowers, including sweet peas, roses and peonies, are arranged alongside imported cherry blossoms to decorate a mix of round and rectangular dinner tables in the East Room in shades of pink. A few floral centerpieces top out at 6 feet (1.8 meters) tall. Tables were set with a mix of place settings representing the administrations of Presidents Lyndon B. Johnson and George W. Bush. Glass and silk butterflies will dance over the tables. After dinner, Simon will perform. He is one of Jill Biden's favorite artists, the White House said, adding that she chose him as a special tribute to Kishida because the prime minister also admires Simon's work. Simon's career spans six decades, including performing as part of a duo with his childhood friend Art Garfunkel. The 82-year-old New Jersey native has earned numerous accolades, including multiple Grammys and a place in the Rock & Roll Hall of Fame. Also providing entertainment are "The President's Own" Marine Band Chamber Orchestra, the Army Rolling Strings and the Air Force Strings. Kishida is the fifth world leader Biden has honored with a state dinner following counterparts from France, South Korea, India and Australia.