{"id":54803,"date":"2023-12-13T13:08:39","date_gmt":"2023-12-13T13:08:39","guid":{"rendered":"https:\/\/prosfunds.com\/business\/wall-street-is-more-concerned-with-the-fed-than-war-overseas\/"},"modified":"2023-12-13T13:08:40","modified_gmt":"2023-12-13T13:08:40","slug":"wall-street-is-more-concerned-with-the-fed-than-war-overseas","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=54803","title":{"rendered":"Wall Street is more concerned with the Fed than war overseas"},"content":{"rendered":"
\n

\n Titans of finance have been warning for months that looming geopolitical dangers are the biggest threat by and large to the US economy. But even as wars rage on in the Middle East and Eastern Europe, markets have been enjoying an end-of-year rally.\n <\/p>\n

\n The S&P 500 reached its highest level since January 2022 on Tuesday, following new data that showed cooling inflation. The surge came even as the Israel-Gaza war intensified and the Russia-Ukraine war approached the end of its second year.\n <\/p>\n

\n It appears that, for now, <\/strong>Wall Street is skeptical of the impact of war on the US economy and is instead more focused on the Federal Reserve and inflation rates than conflict abroad. <\/strong>\n <\/p>\n

\n What\u2019s happening: <\/strong>JPMorgan CEO Jamie Dimon has repeatedly said that geopolitical <\/strong>uncertainty <\/strong>is currently the biggest risk in the world.\n <\/p>\n

\n He stressed, at last month\u2019s New York Times DealBook Summit, that this may be the most dangerous time the world has seen in decades, and that the wars in Ukraine, Israel and Gaza could have far-reaching impacts on global <\/strong>energy, food supply, trade and geopolitics. It could even, he said, lead to nuclear blackmail (using the threat of nuclear warfare as leverage to coerce another country into meeting certain demands).\n <\/p>\n

\n He\u2019s not alone. EY\u2019s latest CEO Outlook Pulse survey found that 99% of CEOs said they were shifting their investments in response to geopolitical challenges.\n <\/p>\n

\n Violent conflicts abroad pose the largest threat to markets next year, according to a Natixis survey of 500 institutional investors from around the world.\n <\/p>\n

\n \u201cThe biggest macroeconomic risk for 2024 is geopolitical bad actors who with one action can upset economic and market assumptions globally,\u201d the group wrote. That risk ranked above policy errors by central banks, a slowing Chinese economy and dwindling consumer spending.\n <\/p>\n

\n But the S&P 500 is up by 9% since Hamas\u2019 October 7 attack and up 10% since Russia\u2019s full-scale invasion of Ukraine in February, 2022.\n <\/p>\n

\n \u201cMany armchair forecasters bid up hysteria regarding the ongoing war in Ukraine and the October 7 terrorist attack in Israel,\u201d wrote Marko Papic, Chief Strategist at the Clocktower Group, in a note this week. \u201cIn the end, neither event had any impact on markets.\u201d\n <\/p>\n

\n All about the Fed: <\/strong>Instead, investors appear locked in on the Fed.\n <\/p>\n

\n Policymakers commence their final meeting of the year on Wednesday afternoon and investors are all but certain they\u2019ll keep rates steady.\n <\/p>\n

\n The labor market and inflation rates are showing signs of weakening, and Wall Street is betting that interest rate cuts will begin in 2024.\n <\/p>\n

\n There\u2019s much to celebrate \u2014 and investors aren\u2019t going to let geopolitics get in the way of their holiday cheer.\n <\/p>\n

\n Yes, but:<\/strong> It\u2019s a game of wait-and-see for markets, say some economists.\n <\/p>\n

\n \u201cWith geopolitical tensions elevated in the world, I think it\u2019s very important that we don\u2019t conflate the very muted response that we\u2019ve seen, say over the last four to five weeks, with markets being very sanguine, because they\u2019re not,\u201d commented Sinead Colton Grant, incoming chief investment officer at BNY Mellon, at last month\u2019s Reuters NEXT conference in New York.\n <\/p>\n

\n \u201cThey\u2019re watching the evolution very, very closely and there\u2019s an assumption that all these events remain fairly contained. Should that turn out not to be the case, you will see markets react quite sharply, and that would reverberate beyond the equity markets,\u201d she said.\n <\/p>\n

\n Argentina will devalue the peso by more than 50% as part of emergency measures to help the nation\u2019s struggling economy, the country\u2019s Economy\u00a0<\/strong>Minister Luis Caputo announced Tuesday.\n <\/p>\n

\n The stark move changes the official conversion rate to 800 pesos per dollar from 365 pesos and comes just days into President Javier Milei\u2019s term, reports my colleague Krystal Hur.\n <\/p>\n

\n Milei campaigned on a pledge to get rid of the peso and replace it with the dollar in order to get the economy back on track. The peso has been artificially supported for years by strict capital controls, and its value has plunged roughly 52% this year against the US dollar.\n <\/p>\n

\n Argentina\u2019s central bank in recent years has printed more of the peso to help the country\u2019s government avoid defaulting on its debt. That has resulted in skyrocketing prices.\n <\/p>\n

\n The move marks the first of several steps to tamp down that hyperinflation, which led Argentina\u2019s central bank in October to raise its benchmark interest rate to 133%.\n <\/p>\n

\n Caputo on Tuesday reiterated Milei\u2019s campaign theme that \u201cthere is no money\u201d as he outlined other measures, including a cut to new public works projects,\u00a0<\/strong>plans not to renew labor contracts that have been in effect for than one year and reducing energy and transportation subsidies.\n <\/p>\n

\n \u201cFor a few months we\u2019ll be worse off, particularly with inflation,\u201d he said.\n <\/p>\n

\n Regarding public works, Caputo said that \u201cthere\u2019s no money to pay for works that often end up in the pockets of politicians and business people.\u201d\n <\/p>\n

\n The International Monetary Fund said Tuesday following Caputo\u2019s remarks that it supports the new initiatives.\n <\/p>\n

\n \u201cIMF staff welcome the measures announced earlier today by Argentina\u2019s new Economy Minister, Luis Caputo. These bold initial actions aim to significantly improve public finances in a manner that protects the most vulnerable in society and strengthen the foreign exchange regime,\u201d Julie Kozack, IMF director of communications, said in a press release.\n <\/p>\n

\n The University of Pennsylvania\u2019s board of trustees is tapping J. Larry Jameson, its longest serving dean, to become the school\u2019s interim president, replacing Liz Magill, following her\u00a0resignation\u00a0last weekend.\n <\/p>\n

\n Jameson is dean of UPenn\u2019s medical school and will take the helm of the Ivy League institution at a moment of crisis, reports CNN\u2019s Matt Egan.\n <\/p>\n

\n The\u00a0board of trustees said\u00a0Jameson will be appointed as interim president effective Tuesday and remain in that role until a permanent president is named.\n <\/p>\n

\n \u201cPenn is fortunate to have the benefit of Dr. Jameson\u2019s experience and leadership during this time of transition,\u201d Julie Platt, the interim chair of UPenn\u2019s board of trustees, said in an announcement sent Tuesday afternoon.\n <\/p>\n

\n Platt praised Jameson as a \u201cconsummate University citizen\u201d and a \u201ccollaborative, innovative and visionary leader with extensive engagement with each of Penn\u2019s 12 schools.\u201d\n <\/p>\n

\n Both of UPenn\u2019s leaders as of a few days ago \u2014 board chair Scott Bok and Magill \u2014\u00a0departed Saturday\u00a0just a week after Magill\u2019s\u00a0disastrous testimony\u00a0before Congress on antisemitism.\n <\/p>\n

\n Magill stepped down under immense pressure on Saturday after struggling to answer whether calls for genocide against Jews violates university rules. Magill had remained interim president until Tuesday. Penn did not have a succession plan in place despite a flood of calls for Magill\u2019s resignation this week, a source told CNN.\n <\/p>\n

\n Magill will remain on Penn\u2019s faculty as a tenured professor at Penn Carey Law School.\n <\/p>\n

\n Jameson is\u00a0UPenn\u2019s longest-serving dean\u00a0and previously\u00a0denounced calls for genocide\u00a0as a form of hate, according to The Daily Pennsylvanian. Jameson also serves as executive vice president of the University of Pennsylvania for the Health System.\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Titans of finance have been warning for months that looming geopolitical dangers are the biggest threat by and large to the US economy. But even as wars rage on in the Middle East and Eastern Europe, markets have been enjoying an end-of-year rally. The S&P 500 reached its highest level since January 2022 on Tuesday, […]<\/p>\n","protected":false},"author":1,"featured_media":54804,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-54803","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nWall Street is more concerned with the Fed than war overseas | Prosfunds<\/title>\n<meta name=\"description\" content=\"Titans of finance have been warning for months that looming geopolitical dangers are the biggest threat by and large to the US economy. 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