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Why the COP28 deal is awkward for the US
This week’s landmark climate change agreement called on countries across the world to reduce the use of fossil fuels. For the U.S., the biggest oil and gas producer in the world, this is a little awkward.
US stocks rose sharply on Wednesday following the Federal Reserve’s final interest rate decision of the year
• The Fed left its benchmark interest rate unchanged at 5.25%-5.5% , acknowledging that it’s likely at or near the peak of this rate tightening cycle. The committee’s consensus projections also indicated at least 75 basis points of interest rate cuts in 2024 , sending the 10-year Treasury yield below 4.1%, and the Dow to a fresh all-time high.
• Shares of Pfizer fell 6.7% to its lowest intraday level since 2013 after forecasting lower-than-expected earnings and revenue for 2024. The pharmaceutical company also expects to generate nearly $3 billion less in sales from its Covid-19 products than predicted.
• Etsy stock fell 2.2% after announcing plans to cut 11% of its workforce.
• Virtual primary care provider LifeMD and wellness company Medifast are teaming up to create a weight management program. Both companies’ shares dropped following the news.
• The 30-year mortgage rate fell to 7.07%, the lowest level since July. Refinance applications increased by 19% from the previous week.
• The producer price index, which measures wholesale inflation, was unchanged in November. Year-over-year, prices rose 0.9%.
What to be on the lookout for today
• November retail sales will be released and Costco will report earnings.
Liz Looks at: The December Fed Statement
The Federal Reserve sure knows how to end the year with a bang. In the last FOMC meeting of 2023, Chairman Jerome Powell acknowledged the central bank’s key interest rate was “at or near its peak for this tightening cycle”, making it increasingly likely that we might see interest rate cuts in 2024, something the market had already been penciling in.
This year was all about watching inflation data to track the impact of the Fed’s rate hikes. With price increases cooling, the next data points to watch may be coming from the labor market to inform if and when rate cuts might start. SoFi Head of Investment Strategy Liz Young gets into it with the December FOMC statement, and what investors might want to watch for in the new year.
Today’s top stories
What does the cost of cardboard tell us about the economy? Cardboard prices are rising for the first time since the Fed’s rate hiking cycle started. Here’s what this tells us about the state of economic growth, inflation and the U.S. consumer. Read more >> This one product is bucking the high inflation trend Toys are getting cheaper, and consequently flooding households with young children, leaving parents dreading bringing even more toys into their homes this holiday season. Read more >> Your guide to Fed policy What does it mean if the Federal Reserve is dovish or hawkish? Find your cheat sheet here. Read more >>Other news that caught our eye
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Apple introduced a new security feature for iPhones to protect users against passcode theft. If your device is in an unfamiliar location, it will require FaceID to unlock.
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Tesla recalled more than 2 million vehicles over an Autosteer defect. The EV maker will also release an over-the-air software fix.
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Netflix released its most viewed titles of the past six months. The streamer has historically held viewership data close to the chest, but now plans to publish similar reports twice per year.
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Sports Illustrated publisher Arena Group ousted its CEO following allegations that the company used AI to generate content and created fictitious author bios for its website.
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Airbnb agreed to pay $621 million to settle a tax dispute in Italy that alleged the company failed to pay as much as $840 million in short-term rental taxes on behalf of hosts in the country.
Financial planner tip of the day
“Asset allocation is the strategy of balancing risk and reward by divvying up a portfolio into different asset types. The goal of diversification is to invest in such a way that not all investments perform the same or even similarly during different periods over the course of an investment journey.”
Brian Walsh, CFP® at SoFi