Stocks edged higher on Tuesday as investors looked to build on a strong start to 2023 while awaiting consumer data due later this week.
The Dow Jones Industrial Average rose 67 points, or 0.2%. The S&P 500 rose 0.2 percent and the Nasdaq Composite gained 0.4 percent. The S&P 500 rose about 1.1% in the first five days of trading through Monday in 2023, which some say bodes well for the rest of the year.
Paul Tudor Jones was bullish on stocks Tuesday morning, saying the Federal Reserve may not wreak havoc on the economy by stopping rate hikes before it does. Jones, who said he didn’t make a specific forecast, said there will be huge demand for shares this year from share buybacks and mergers.
“You probably have less than $1 trillion in excess demand for U.S. equities,” Jones said on CNBC’s “Squawk Box” Tuesday. The need for some combination? That’s a lot of money. All else being equal, the stock market is going to be up 7% or 8% this year.”
Speaking before the market opened on Tuesday, Federal Reserve Chairman Jerome Powell said the central bank needs to be politically independent while tackling inflation. Futures were little changed on his remarks.
Heading into the new year, investors worried that the Federal Reserve’s rate hikes could tip the economy into recession. But many seem to be increasingly betting that inflation will start to ease in early 2023. Later in the week, they will focus on consumer price index data on Thursday and big bank earnings on Friday.
“We could be in this very narrow range and probably lose our way until we get through at least the CPI report on Thursday and then the start of earnings season later this week,” Chief Investment Officer Megan Hornman said. Said the senior staff of Verdence Capital Advisers. “Right now, I just think the market is kind of caught up in waiting for the economic data and absorbing some of the speech from the Fed.”