Earnings picture is supporting the stock market, Chris Hyzy says
Wednesday’s policy decision from the Federal Reserve will be the first since July 26, which happened early in the second-quarter earnings season.
And while the S&P 500 is down about 2.7% since that day, the earnings picture has largely held up. And that could help explain why stocks are holding up even as interest rates have started to climb again.
“The market’s resilient because of earnings. it pushes all of the other narrative and all of the other stories to the side for now,” Chris Hyzy, CIO at Merrill and Bank of America Private Bank, said Tuesday on “Closing Bell.”
— Jesse Pound
Higher oil prices are near-term headache for central banks but don’t threaten high inflation
“[G]iven that inflation remains above target, the recent rise in oil prices creates a near-term headache for central banks, which they may well convey by toeing a hawkish line,” Simon MacAdam, senior global economist at Capital Economics wrote in a note to clients Tuesday entitled, “Higher oil prices not a game-changer for inflation.”
London-based Capital Economics doesn’t believe higher crude oil prices will pave the way for “a sustained rebound in inflation,” or that central banks in developed economies will react by pushing up interest rates or even keep them higher for longer solely due to the energy markets.
“[W]e do not believe that the recent increase in oil prices will cause central banks in advanced economies to respond with interest rate hikes. For oil prices to have a bearing on the outlook for monetary policy, central banks would probably need to see prices rise higher and for a sustained period against a backdrop of resilient activity and rising inflation expectations,” MacAdam said.
— Scott Schnipper
Stock futures open little changed
Futures were calm on Tuesday evening when trading reopened at 6 p.m. ET. Futures for the Dow, S&P 500 and Nasdaq 100 all moved by less than 0.1%.
— Jesse Pound