Shares of industrial and transportation companies experienced a significant boost following remarks made by a Federal Reserve official. Dallas Fed President Lorie Logan suggested that if market bond rates continue to stay high due to increased term premiums, there might not be as much urgency to raise the Fed-funds rate. This statement provided some much-needed clarity amidst possible market misconceptions.
According to J.D. Joyce, president of Houston financial advisory Joyce Wealth Management, Logan’s comments were not as straightforward as they may have seemed. He remarked, “It wasn’t as black and white as maybe the market was interpreting, in my opinion.” Joyce emphasized that the rates rising naturally through market fundamentals in the bond market could hinder the necessity for rate increases.
Additionally, General Motors and Ford Motor experienced a slight rise in their stock prices. This increase can be attributed to the United Auto Workers’ decision not to expand a strike that occurred last week. However, a separate labor action took place, with nearly 4,000 UAW members going on strike at Volvo Group’s Mack Trucks unit after rejecting a five-year contract proposal.