Wall Street's main stock indexes rallied on Wednesday and were on track for their biggest one-day percentage gain so far this month with help from upbeat Nike and FedEx quarterly updates, as well as improving consumer confidence and easing inflation expectations from investors.
rose to an eight-month high in December as inflation retreated and the labor market remained strong while 12-month inflation expectations fell to 6.7%, the lowest since September 2021.
"We're seeing a broad rally. It's been helped by upbeat corporate commentary and an improvement in consumer confidence," said Angelo Kourkafas, investment strategist at Edward Jones in St Louis referring to Nike and FedEx.slumped 7.7% to a 2-1/2-year low in November as the housing market was hurt by higher mortgage rates.
Fears of a recession following the U.S. central bank's prolonged interest rate hikes have weighed heavily on equities and these fears have put the S&P on track for its biggest annual decline since 2008 and a loss of almost 5% for December. "There's still a lot of uncertainty and we're likely to see a lot of volatility early in the year as we could be in a mild recessionary environment," said Kourkafas but he suggested that the market has already priced in a weaker economy.
"We still have some headwinds ahead but maybe we don't have to price in a recession twice. So far what we've seen this year has already priced in a mild recession."
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