Markets Thursday will give more than a glancing look at one of the last big batches of economic data this year, now that the Fed has signaled it could speed up interest rate hikes.
The Fed on Wednesday raised its short-term target rate by 25 basis points in its second rate hike in a year. The Fed also surprised markets with a forecast that showed it could raise rates three times next year, instead of two.
"I think we're moving into a healthier environment where the economic data matters. You have a Fed that is certainly watching global growth and watching inflation around the world," said Rick Rieder, CIO of global fixed income at BlackRock.
Data Thursday includes CPI inflation data, jobless claims, the Empire Fed survey and Philadelphia Fed survey, all at 8:30 a.m. ET. There is also Markit manufacturing PMI at 9:45 a.m., NAHB homebuilder sentiment at 10 a.m., and Treasury capital flow data, at 4 p.m.
Bond yields spiked Wednesday afternoon, the dollar soared and stocks sold off hard on the prospect of more rate hikes. The dollar index rose more than 1 percent and the euro fell to $1.05. The market will watch the greenback since a rising dollar can be a negative for corporate profits.
Market chatter Wednesday immediately jumped to the possibility that the Fed could raise rates even more than its forecast, once the tax plans and fiscal spending programs proposed by President-elect Donald Trump are instituted.
Rieder said the plans to cut corporate taxes could be a positive for the economy, and the business surveys are picking up. "I'm on the enthusiastic side. I think growth is going to be better than people think, and if you get that, the Fed will react to it," Rieder said.
The two-year Treasury yield, which is most sensitive to the Fed, rose to 1.27 percent Wednesday, its highest level in seven years. The 10-year jumped to 2.57 percent.
"I certainly think we could hit a 3 (percent 10-year yield) by the first quarter of the year," said Rieder. The 10-year was last at 3 percent in January 2014. He said the yield could reach 2.75 percent before the end of this year, but after the 10-year reaches 3 percent it may not have that much further to go.
Stocks were slammed Wednesday, and even the financial sector, which is helped by higher interest rates, sold off. The Dow fell 118 points, to 19,792, and the S&P 500 dropped 18 to 2,253.
"Going into this, there were so many questions about what could the Fed say that could be a road block to Dow 20,000. I guess the Fed was more hawkish than the market had wanted even though Janet Yellen at the press conference basically said we're data dependent, and we don't know what the future holds in terms of stimulus and tax cuts," said Quincy Krosby, market strategist at Prudential Financial. "She said the economy was resilient and she was much more positive than she has been. She used the word gradual a couple of times. The market was hoping she'd use that word more. This was one where the market in a sense was already moving toward a pullback."
Krosby said the market has history on its side, and next week could be a good one for stocks. "I think you're going to see buyers coming in on this dip," she said. Krosby said she expects to see buying interest in the financial names.
"Next week happens to be the sweet spot for the market in terms of performance. Statistically next week seems to be the week in which if you haven't caught up in your performance, if you're a hedge fund or portfolio manager, you're going to use that week to make that performance. There's nothing [Yellen] said that should have made this market nervous. I think the market was poised for a pullback. We saw the dollar move markedly higher, which isn't something you want, and yields are rising," said Krosby.
Here at FiveThirtyEight, our favorite election-related chart is what we officially call the winding path to 270 electoral votes and unofficially call the snake. Designed by my colleague Aaron Bycoffe, it lines the states up from most favorable for Hillary Clinton (Hawaii, Maryland) to best for Donald Trump (Wyoming, Alabama) based on the projected margin of victory in each one. The snake is bisected by a line indicating 269 electoral votes: cross this line meaning you get 270 electoral votes and you win the election.
As women fight what has been an uphill battle for equal pay, they continue to face another exacerbating factor: being penalized for the fact that they could regardless of whether they will have children.
While much of the public discussion of the "wage gap" has focused around women getting equal pay for the same work as their male peers, this quiet "pregnancy penalty" has gotten less attention, in part because it's so much more difficult to measure. But some experts argue that even the mere possibility that a woman can have a baby can be enough for employers to push her to the back of the line.
Women already know that announcing their pregnancy in the workplace will likely
Police have evacuated homes and businesses near a motorcycle shop in Neenah, Wisconsin, in the wake of a shooting and possible hostage situation, according to police and the local media.
A man walked into Eagle Nation Cycles in Neenah, a city of about 25,000 people some 100 miles (160 km) north of Milwaukee, on Saturday morning and fired a gun and the scene became an active hostage situation, according to WBAY-TV in nearby Green Bay, citing a police report.
One person was taken to a hospital, the station said.
On its Facebook page, the Neenah Police Department said one shot was fired and it had evacuated homes and businesses, but it provided no further details. People were being asked to stay at least a quarter mile away from the scene.
(Reporting by Kevin Murphy in Kansas City; Editing by Alan Crosby)
Virginia State Police say a chartered bus carrying 51 people, mostly college students, has overturned near Richmond and one person has been seriously injured and 34 others suffered minor injuries.
State Police spokeswoman Corinne Geller told The Associated Press there were no confirmed fatalities after the bus overturned after 7 p.m. Sunday on a ramp of the Powhite Parkway in north Chesterfield County. A police statement says the driver lost control on a curve of the ramp and the bus overturned on its side.
The statement said the students had been picked up in Richmond to be driven back to the University of Virginia, Virginia Tech and Radford University, as the holiday weekend closed.
Police say the bus driver, who also had minor injuries, has been charged with reckless driving.
Updated at 2:30 p.m. ET
The death toll in a stampede of hajj pilgrims in Saudi Arabia this week has risen to 769, many of whom are Iranians. Tehran has denounced the tragedy as a "crime."
"The latest statistics up to this hour reveal 769 dead. That is an increase of 52 on the previous figures," Saudi Health Minister Khalid al-Falih told a new conference, according to Arab News.
"Those are the ones who died in various hospitals since the event," he said, adding that 934 people had been injured in the deadly crush of people as they carried out a symbolic stoning of the devil on Thursday.
Iran has reported the biggest number of deaths at 136, with Morocco coming next with 87.
Survivors and witnesses have said inadequate security near the most sacred sites on the annual Muslim pilgrimage in Mecca contributed to the stampede. The reports have set up a war of words between mainly Shiite Iran and overwhelmingly Sunni Saudi Arabia.
Iran's Supreme National Security Council had accused Riyadh of incompetence, but according to Reuters, Iran's Prosecutor General Ebrahim Raisi went further today.
"'We will urge international courts and circles to start the trial of the Saudis for their crimes against haj pilgrims,' Iran's Prosecutor General Ebrahim Raisi was quoted as saying by student news agency ISNA on Saturday.
"'This is not incompetence, it's a crime,' he told state broadcaster IRIB."
More than 300 Iranians remain unaccounted for, including former ambassador to Lebanon Ghazanfar Roknabadi, according to Fars news agency.
Meanwhile, as the BBC reports Saudi Arabia's Grand Mufti Sheikh Abdul Aziz bin-Abdullah al-Sheikh told Interior Minister Crown Prince Mohammed bin Nayef, who is also head of the Supreme Hajj Committee, that he is "not responsible for what happened."
- It's the economy that matters now that the Fed is off the sidelines - CNBC
- Clinton's Leading In Exactly The States She Needs To Win - FiveThirtyEight
- 'Motherhood Penalty' Can Affect Women Who Never Even Have a Child
- Shooting, hostage situation reported at Wisconsin shop - Reuters
- Police: Bus Overturns, 1 Serious Injury, 34 Minor Injuries - ABC News
- Death Toll In Hajj Stampede Rises To 769