Home » Business » Fed meeting minutes made market sentiment cautious, major indices mixed | Anue Juheng – US equities

Fed meeting minutes made market sentiment cautious, major indices mixed | Anue Juheng – US equities

After the Federal Reserve (Fed) recently released the minutes of its July meeting, investors were looking for clues about future interest rate hikes after the pace of tightening policy eased. Major US equity indices were mixed. Thursday (18).

Before the deadline,Industrial average of the Dow Jonesdown by almost 0.3%,Nasdaq Composite Indexfell by almost 0.2%,S&P 500 Indexfell by almost 0.2%,Semiconductor of PhiladelphiaThe index was up nearly 1%.

The number of Americans who received unemployment benefits last week reported 250,000, the first drop in three weeks, indicating that the job market is still healthy.At the same time, the Philadelphia Fed manufacturing index reported 6, 2 in August, just not much higher than expected. 5.0, but also well above the previous value – 12.3, but economic conditions and new orders remained weak at -10.6 and -5.1 respectively.

Although the latest minutes of the Fed meeting did not clearly indicate the specific speed of interest rate hikes since the September 20-21 meeting, it did show that US central bank policymakers have pledged to raise interest rates as quickly as possible. as high as possible to curb inflation.

Subtle signals are not enough to keep the market in a risky position. Caution is the tone for the market right now, with more clues coming to the Fed’s annual symposium in Jackson Hole, Wyoming, next week.

Swap contracts tied to the Fed’s policy meeting date show a lower likelihood of a 3-yard (75 basis point) rate hike next month than a 2-yard (50 basis point) rate hike. Before the deadline, according to the CME Group’s FedWatch Tool, the probability of a 2-yard rate hike was 63.5% and the probability of a 3-yard rate hike was 36.5%.

Expectations of a slower pace of policy tightening and a move to rate cuts later in the next year have pushed global equities up 12% from their June lows. Market sentiment, however, could be too optimistic and, in the worst case, could lead to persistent price pressures, forcing to limit financing costs due to the downturn in the economy.

In Europe, Isabel Schnabel, an executive member of the European Central Bank, said today in an interview that inflation outlook hasn’t changed since the European Central Bank (ECB) raised interest rates on July 2, and neither a recession will be enough to ease prices. Pressure, suggesting that another sharp rate hike is likely next month. Martins Kazaks, a member of the Governing Council of the European Central Bank, also said the ECB will continue to raise interest rates.

In other news, China’s high-temperature power outages have limited the production of the auto industry chain in the Sichuan-Chongqing region, according to Chinese media.TSLA-USA), Weilai (NIO-US) until the suspension of the debit service.

Starting at 9:00 pm Thursday (6 pm) Taipei time:
S&P 500 daily chart. (Image Source: Juheng.com)
Featured titles:

by Kohl (KSS-USA) fell 5.33% to $ 32.14 per share at the start of the trade

Kohl’s announced its last quarter financial report ahead of the market.Although revenue and profits were better than market analysts’ expectations, it lowered its full-year financial forecast due to increased promotions and costs. Kohl posted revenue of $ 4.09 billion and adjusted earnings of $ 1.11 per share last quarter, both of which beat analyst estimates of $ 3.85 billion and $ 1.03. The company expects tax revenues for 2022 to drop from 5% to 6%, compared to a previous forecast for a year – an annual increase of 1%.

Cisco (CSCO-USA) rose 5.97% to $ 49.45 per share at the start of the trade

Networking equipment giant Cisco (Cisco) announced Wednesday (17) revenue and profits after the market last quarter that were better than market expectations, easing concerns about slowing corporate technology spending and financial outlook for the new year surprised the market, suggesting that as supply chain bottlenecks caused by wafer shortages ease, it is able to fulfill more orders.

Bathroom bed and beyond (BBBY-US) plunged 20.28% to $ 18.40 at the start of the trade

US homeware retailer Bed Bath & Beyond plunged more than 14% in pre-market trading after investor Ryan Cohen, president of GameStop, said in a filing that it would sell its 7.78 million. of Bed Bath shares for a total purchase price of approximately $ 119.4 million, excluding brokerage fees.

The main economic data today:
  • The first jobless claims in the US reported 250,000 last week, 265,000 expected and 252,000 previously
  • The number of people receiving unemployment benefits in the United States reported 1.437 million last week, 1.438 million are expected and the previous value was 1.43 million
  • US Philadelphia Fed Manufacturing Index reported 6.2, expected – 5.0, previously – 12.3
  • Annualized total US existing home sales in July were 4.81 million units, approximately 4.89 million units and the previous value of 5.11 million units
  • US July existing home sales annualized monthly rate of -5.9%, the previous value -5.4%
  • The monthly rate of the July US Conference Leading Indicator was -0.4%, the forecast was -0.5%, the previous value was -0.7%
Wall Street Analysis:

Kathryn Kaminski, AlphaSimplex Group’s chief research strategist and portfolio manager, said investors are a little too optimistic about a quick resolution of inflation, arguing that no further policy and interest rate hikes would be needed.

Deutsche Bank analysts said risk assets rose strongly due to the claim that “inflation peaked” in the market, but yesterday’s event ended abruptly and many newspapers reported the content of the market. Minutes of the meeting, to be released by the central bank Expectations of a slower pace of interest rate hikes have poured cold water.

Mohammed Apabhai, head of Asia-Pacific trading strategy at Flagship Group, said the environment that led to the current bear market rally is about to change as investors desperately need a safe haven. He also said that the Fed has seen some easing in monetary conditions and is now ready to continue tightening monetary policy, especially starting September 1, doubling the scale of quantitative tightening from the current $ 47.5 billion to $. 95 billion.


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