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NEW YORK (Dow Jones) — US stocks are expected to start trading a little firmer on Thursday. The futures on the S&P 500 are up 0.5 percent pre-market. Trading is likely to continue to be characterized by a very volatile environment.
The high level of inflation and the rapid turnaround in interest rates by the US Federal Reserve in the fight against inflation continue to cause uncertainty among investors. The day before the Senate Banking Committee, US Federal Reserve Chairman Jerome Powell had confirmed the Fed’s rapid rate hike course. However, he stressed that the US economy is very strong and well positioned for a tightening monetary policy to deal with. However, there is still concern on the markets that the economy could slide into a recession.
According to JP Morgan, the US has a 35 percent chance of sliding into a recession in the coming year. While the economy appears to have maintained its momentum, growth will slow once the Fed’s rate hikes hit the economy. “Our forecast assumes that the Fed will achieve a soft landing at least by the end of next year,” the analysts said.
Investors are now focusing on the second round of the Fed Chair’s hearings, this time Powell will answer questions before the House Financial Services Committee in the afternoon (4 p.m. EDT). However, no news on the interest rate should be expected here.
On the economic side, the weekly number of initial applications for unemployment benefits has fallen, but not as much as forecast by economists. Meanwhile, the US current account deficit rose more than expected in the first quarter of 2022.
However, the main focus is on the Purchasing Managers’ Indices (PMI) for the manufacturing and service sectors for June, which are due shortly after the starting bell. Investors are hoping for information about the state of the economy.
Oil prices fall slightly – dollar under pressure
Oil prices are relatively stable after the significant drops of the previous day due to the ongoing fears of a recession. The price of a barrel of the WTI variety fell slightly by 0.2 percent, the Brent price was 0.1 percent lower.
On the foreign exchange market, the euro reacts with a setback to that in France, Germany and also the euro zone overall in June the purchasing manager indices for the manufacturing and service sectors were below expectations. At the same time, they deteriorated significantly compared to May, although they were still able to remain in the area that indicates expansion. The euro fell 0.6 percent to $1.0503.
Government bonds are still in demand as safe havens in view of the ongoing recession concerns. The 10-year yield fell 4.3 basis points to 3.12 percent.
Accentur by numbers with discounts – Steelcase more solid
Accenture gave way before the market by 3.3 percent after the consulting company’s business figures for the third quarter were not convincing in all respects. In addition, Accenture gave a rather pessimistic outlook.
According to the CEO, the new Tesla plants in Greenheide and Texas are losing Elon Musk billion. In an interview he called them “gigantic money incinerators”. Supply chain disruptions and battery manufacturing difficulties prevented the electric carmaker from ramping up production. But he assumes that Tesla will solve the problems quickly, Musk added. Tesla stock is up 1.3 percent.
Steelcase grew 1.3 percent after the office outfitter presented its first quarter figures. The company was able to narrow the loss while at the same time increasing sales and thus exceeding expectations.
Homebuilder KB Home performed better-than-expected on profit and revenue for its second fiscal quarter. In addition, the company stuck to its sales target for the year as a whole, even if negative effects are to be expected due to rising interest rates. The stock gains 3.7 percent.
HB Fuller down 2.5 percent. The adhesives expert was not able to convince with its figures for the second business quarter and the outlook. The company warned of significantly increasing costs in the current year and therefore intends to raise prices.
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 3.01 -3.7 3.05 228.0
5 years 3.15 -8.2 3.24 189.3
7 years 3.18 -6.0 3.24 174.2
10 years 3.12 -4.3 3.16 160.8
30 years 3.22 -3.3 3.25 131.9
FOREX last +/- % Thu 12:00 Wed 17:19 % YTD
EUR/USD 1.0503 -0.6% 1.0516 1.0590 -7.6%
EUR/JPY 142.06 -1.3% 142.36 143.86 +8.5%
EUR/CHF 1.0131 -0.2% 1.0161 1.0162 -2.4%
EUR/GBP 0.8577 -0.4% 0.8624 0.8612 +2.1%
USD/JPY 135.27 -0.7% 135.38 135.84 +17.5%
GBP/USD 1.2244 -0.2% 1.2197 1.2298 -9.5%
USD/CNH (Offshore) 6.7055 -0.1% 6.7084 6.7044 +5.5%
BTC/USD 20,692.28 +3.6% 20,718.24 20,537.22 -55.2%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 105.93 106.19 -0.2% -0.26 +46.8%
Brent/ICE 111.67 111.74 -0.1% -0.07 +48.0%
GAS VT close +/- EUR
Dutch TTF 134.66 126.30 +5.9% 7.49 +52.0%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,831.33 1,837.78 -0.4% -6.46 +0.1%
Silver (Spot) 21.19 21.41 -1.0% -0.22 -9.1%
Platinum (Spot) 923.16 929.75 -0.7% -6.59 -4.9%
Copper Future 3.84 3.94 -2.5% -0.10 -13.5%
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(END) Dow Jones Newswires
June 23, 2022 08:52 ET (12:52 GMT)
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