A man buys fruit at a grocery store in New York City on February 1, 2023.
Leonardo Muñoz | Corbis News | Getty Images
This report is from today’s international market newsletter CNBC Daily Open. The CNBC Daily Open provides investors with everything they need to know, no matter where they are. Like what you see?You can subscribe here.
stock price rise
Wall Street closed higher on Tuesday, with the S&P 500 index rising 1.1% to a new record. The blue-chip Dow rose more than 200 points and the Nasdaq rose 1.5% after U.S. inflation data came in slightly better than expected in February.
Record dividends to shareholders
Shareholder dividends reached a record $1.7 trillion last year, according to a new report from British asset manager Janus Henderson. Almost half of the global dividend increase came from the banking sector, which delivered record dividends as higher borrowing costs boosted lenders’ profit margins, the report said.
Boeing crisis hits airlines
CEOs of multiple airlines say Boeing’s delivery delays are forcing airlines to change their growth plans. Boeing’s crisis has deepened since a door plug erupted during a flight on an Alaska Airlines Max 9 plane in January. Southwest Airlines, Alaska Airlines and United Airlines are some of the top buyers of Boeing aircraft affected by the issue.
Citadel of rate cuts
Citadel founder and CEO Ken Griffin said inflation tailwinds remain and the Fed shouldn’t cut rates too quickly. “If I were them, I wouldn’t want to cut rates too quickly,” he said, adding that it would be “more devastating” if they had to change course after cutting rates first. “I think the rate cut will come a little later than people expected two months ago.”
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Inflation rose again for the second month in a row.
February’s consumer price data was slightly better than January’s alarming inflation data.
Still, core inflation, which excludes food and energy, was stronger than expected, rising 0.4% last month, reflecting persistent price pressures.
Investors don’t expect this latest data to change the direction of the Fed’s June interest rate cut. That may be why the market reacted so slowly to this news.
“The numbers we have aren’t good news for the Fed, but the market doesn’t see this as a major threat to lower rates this year,” said Kathy Jones, chief fixed income strategist at Charles Schwab. He said it in X.
But the hot print could pose a problem for the Fed, clouding its deliberations about future rate cuts.
“The long-term disinflationary trajectory is likely unchanged, but the path to the Fed’s 2% target will be difficult,” said Jeffrey Roach, chief economist at LPL Financial. “We expect markets to struggle with what this means for Fed policy.”
Next week’s central bank meeting holds high expectations for Wall Street. The main focus for investors will be whether the Fed continues to set three interest rates this year, or whether officials decide to change course.
