Dow Jones futures rose modestly Monday morning, along with S&P 500 futures and Nasdaq futures. The stock market rally diverged last week, with Apple (AAPL) and other megacap techs thriving, which masked some underlying weakness. That comes as President Joe Biden is about to announce whether he will nominate Federal Reserve chief Jerome Powell for a second term with inflation at a 30-year high. Finally, Rivian Automotive (RIVN) is consolidating after the initial-post RIVN IPO surge. Is it time to buy this EV startup?
Apple stock, Amazon.com (AMZN), Tesla (TSLA), Nvidia (NVDA) and Microsoft (MSFT) drove the Nasdaq composite to record highs. The Nasdaq and especially the Nasdaq 100 are looking extended. But the Nasdaq advance-decline has been weakening. Meanwhile, the Dow Jones and Russell 2000 fell last week as tumbling oil prices and Treasury yields hit energy stocks and financials. Blame renewed Covid fears and restrictions, which are also hitting travel names.
Will Biden Nominate Fed Chief Powell For Second Term?
President Biden may announce his nomination for Federal Reserve chair on Monday, according to at least one report. Last Tuesday, Biden suggested he would announce his pick in “about four days,” though a White House official later said a decision would come before Thanksgiving. Biden is set to leave for a holiday trip on Tuesday.
Will Biden stick with Fed chief Powell, or go with someone else, such as Fed Gov. Lael Brainard?
Stock and bond markets appear to favor Powell, whose current term as Fed chairman ends in February 2022.
Fed chief Powell is a known quantity, and gets high marks on Wall Street for his swift action during the coronavirus crash. Now, the Fed is just starting to scale back asset purchases with inflation hitting a 30-year high of 6.2% in October. There’s speculation that policymakers could step up the pace of the Fed taper, perhaps as soon as the December meeting. But resurgent Covid cases could derail economic growth once again. This is a delicate time.
Many observers believe that, at least on monetary policy, Fed Gov. Brainard would be …….