Metals News
McDonald's Faces Earnings Dip as Consumer Spending Tightens
McDonald's has reported a rare miss in quarterly profits, its first in two years, as it failed to meet analyst expectations due to budget-conscious consumers overlooking promotions amid broader economic concerns, including the impact from ongoing conflicts in the Middle East. This financial shortfall coincided with a continuing decline in global sales, marking a fourth consecutive quarter of slowed growth, with the latest figures showing an increase of only 1.9% compared to the anticipated 2.35%.
Rich Retirees' Spending Could Keep Fed Rate Cuts at Bay
Despite expectations of economic tightening, Federal Reserve rate cuts appear unlikely as affluent Americans, particularly retiring baby boomers like Joan Harris, increase their discretionary spending. After retiring, Harris has significantly boosted her travel activities, indulging in more frequent and luxurious trips, including international destinations and first-class accommodations. Her newfound financial freedom, reflective of a broader trend among her demographic, supports continued consumer spending, which in turn sustains economic momentum and discourages rate reductions by the Fed.
Powell's Pivot: Fed Likely to Adopt Tougher Stance as Inflation Climbs
Despite a period of dovish signals, the Federal Reserve is expected to revert to a hawkish stance due to rising inflation figures. This shift, anticipated by economists, comes after Federal Reserve Chair Jerome Powell previously indicated at a 2022 Jackson Hole meeting that tough measures might be necessary to manage inflation. Experts like Ellen Meade and Marc Giannoni suggest that recent easing in financial conditions will likely prompt a more stringent approach to monetary policy.
NYT: A Strong U.S. Dollar Weighs on the World
The U.S. dollar has strengthened significantly against virtually every major global currency this year, affecting nearly two-thirds of the 150 currencies monitored by Bloomberg. This shift, largely due to anticipations of Federal Reserve rate decisions amidst high inflation, has made U.S. assets more attractive and prompted a substantial influx of international capital into the U.S. This robust dollar, reaching heights last seen in the early 2000s, is having wide-reaching impacts from Brussels to Beijing and poses potential serious consequences for the global economy.
Investor Focus on Fed's Rate Strategy Boosts Gold During Rising Inflation
Gold prices rose modestly, rebounding from a 2% drop last week, in anticipation of the upcoming Federal Reserve meeting expected to maintain a policy of high interest rates for an extended period. Despite the broader anticipation of rate cuts this year diminishing due to recent inflation data, gold has gained over 13% this year, reaching record highs earlier this month. The upcoming U.S. jobs report will also play a crucial role in shaping market expectations.