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NEW YORK (Dow Jones) — Wall Street shows up Tuesday noon (local time). The statements by US Federal Reserve Chairman Jerome Powell from the previous day, who brought up the possibility of higher interest rate hikes, are no longer a major negative factor after the previous day’s slight levies, they say. On the other hand, the focus is still on the headlines about the Ukraine war. The Dow Jones index gained 0.7 percent to 34,787 points. The S&P 500 is up 1.0 percent and the Nasdaq Composite is up 1.7 percent.
“The message that came out of last week’s Fed meeting is that the Fed will tighten monetary policy, but the US economy is resilient enough to absorb it,” said Huw Roberts, head of analytics at Quant Insight. “The stock market has decided to emphasize the economic resilience part.” The big variable now is economic growth.
“The Fed sees little option but to fight inflation by raising interest rates more if price pressures continue to mount,” said Susannah Streeter, an analyst at brokerage Hargreaves Lansdown. “And there is little sign of any major relief, the price of oil has continued to rise over the past few days.”
In the Ukraine war, the fighting continues unabated. Ukrainian President Volodymyr Zelenskyy has again called on the Russian head of state Vladimir Putin for direct negotiations. Zelenskyy said in an interview on Monday evening that he was ready to talk about the status of Crimea annexed by Russia and the separatist areas in Donbass.
On the economic side, no market-relevant publications are pending. US Crude Stockpiles data from the private American Petroleum Institute (API) will be released after trading closes.
Bond yields continue to rise
The dollar shows little change. Currency analyst Ulrich Leuchtmann from Commerzbank points out that the money market expects US interest rates to fall again in 2024. The foreign exchange market remains skeptical and is not deriving any new dollar strength from the recent hawkish signals from the US Federal Reserve.
Prices on the oil market continue to be volatile. Brent and WTI are slightly down again after Monday’s strong gains. Participants speak of profit-taking after it had risen by 18 percent in the past three trading days. The developments in the Ukraine war also determine events, it is said. In Europe, for example, the discussion about an energy embargo against Russia continues.
In the bond market, yields continue to rise after climbing sharply to their highest levels since May 2019 on the previous day’s statements by the Fed President. The yield on ten-year paper increased by 7.7 basis points to 2.37 percent.
The price of gold is falling a bit. The significantly higher market interest rates are having a negative effect, making gold less attractive as an interest-free investment.
Looking for bank stocks with rising yields
Against the background of further rising yields and the prospect of more aggressive interest rate hikes in the USA, bank stocks in particular are showing gains. The sector in the S&P 500 is up 2.6 percent.
Nike advance 4.3 percent. The sporting goods manufacturer exceeded market expectations in terms of sales and profits in the third quarter. Qualcomm (+2.0%) is raising $100 million to invest in companies developing new technologies for the Metaverse – a virtual world where people can interact, work and shop.
Okta shares are down 1.5 percent. LAPSUS$ hacking group has posted screenshots on instant messaging service Telegram claiming to have gained access to Okta.com’s Administrator and other systems. Okta said a preliminary investigation found no evidence of ongoing hacking activity and that the images are likely related to a previous security incident in January that has already been fixed.
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INDEX last +/-% absolute +/-% YTD
DJIA 34,787.15 +0.7% 234.16 -4.3%
S&P 500 4,505.08 +1.0% 43.90 -5.5%
Nasdaq Comp. 14,074.80 +1.7% 236.34 -10.0%
Nasdaq-100 14,624.18 +1.7% 248.09 -10.4%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 2.18 +5.9 2.12 144.9
5 years 2.38 +6.0 2.32 112.3
7 years 2.41 +7.3 2.34 97.2
10 years 2.37 +7.7 2.29 86.0
30 years 2.58 +6.6 2.52 68.2
FOREX last +/- % Tue, 8:19 am Mon, 5:13 pm % YTD
EUR/USD 1.1017 -0.0% 1.0968 1.1049 -3.1%
EUR/JPY 132.89 +0.9% 132.05 131.63 +1.5%
EUR/CHF 1.0272 -0.1% 1.0273 1.0275 -1.0%
EUR/GBP 0.8311 -0.7% 0.8351 0.8367 -1.1%
USD/JPY 120.63 +1.0% 120.42 119.14 +4.8%
GBP/USD 1.3256 +0.7% 1.3133 1.3205 -2.0%
USD/CNH (Offshore) 6.3756 +0.1% 6.3718 6.3663 +0.3%
Bitcoin
BTC/USD 42,704.15 +3.8% 42,311.74 41,129.53 -7.6%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 110.21 112.12 -1.7% -1.91 +48.0%
Brent/ICE 114.77 115.62 -0.7% -0.85 +48.9%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,918.73 1,936.23 -0.9% -17.50 +4.9%
Silver (Spot) 24.77 25.23 -1.8% -0.47 +6.2%
Platinum (Spot) 1,019.52 1,040.96 -2.1% -21.44 +5.1%
Copper Future 4.69 4.70 -0.2% -0.01 +5.1%
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(END) Dow Jones Newswires
March 22, 2022 12:22 ET (16:22 GMT)
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