Shares of banks and other financial institutions rose as traders bet the sector would benefit from a slower pace of rate increases.
There's growing optimism that inflation has peaked and the bear market in stocks has reached a lasting bottom. The odds of a 25-basis-point rate increase at the Federal Reserve's next meeting have grown steadily in recent weeks.
"What you're seeing play out on a macroeconomic basis is really a 'Goldilocks' scenario," where growth is neither too hot, and thus no longer stoking inflation, nor too cold, threatening a major recession, said Oliver Pursche, senior vice president at financial advisory Wealthspire. "Most businesses have slowed hiring, or are contemplating layoffs, some are laying people off. And the consequence of that is that it slows wage growth, that slows everything further."
Money manager BlackRock plans to cut about 500 positions or less than 3% of its work force, citing an "unprecedented market environment."
Markets were unusual in 2022, in that both stocks and bonds lost ground and "there was nowhere to hide," said Mr. Pursche.
Citigroup is reshuffling the leadership of its wealth-management business, with Jim O'Donnell, global wealth-management chief, stepping aside to become a vice chairman of the bank, as it searches for a replacement.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
01-11-23 1735ET
