U. S. stock market growing after Fed’s statement on smooth rate hike
2023.03.02 15:21
U. S. stock market growing after Fed’s statement on smooth rate hike
By Ray Johnson
Budrigannews.com – After Atlantic Federal Reserve president Raphael Bostic said he wouldn’t support a return to more aggressive Fed rate hikes, the S&P 500 saw a reduction in losses as Treasury yields fell from session highs.
The Dow Jones Industrial Average gained 0.90 percent, or 220 points, the S&P 500 gained 0.60 percent, and the Nasdaq Composite increased by 0.65 percent.
During a Thursday roundtable discussion with reporters, Bostic stated, “Right now, I’m still very firmly in the quarter-point move” camp.”
The comments allayed concerns that the Fed might be compelled to revert to more aggressive rate hikes of 50 basis points following positive economic data.
The 10-Year and 2-Year Treasury yields reached levels not seen in more than a decade thanks to data indicating a rise in labor costs in the fourth quarter and fewer initial jobless claims than anticipated.
In a note, Jefferies stated, “The bottom line is that labor supply is not increasing in any meaningful way, and there is no evidence that this will change any time soon. Whatever the reason that jobless claims have remained subdued,”
Some Wall Streeters have been forced to price in more aggressive Fed rate hikes and lower earnings as a result of the robust data and hawkish remarks made earlier this week by several Fed members.
Wells Fargo said that it expects an economic downturn to occur in the second half of the year and that interest rates will remain high for a longer period of time.
It continued, “We’ve reduced our target for the S&P 500 Index by year-end 2023 and raised our target range for the federal funds rate to 5.25% to 5.50%.”
Despite a rise in yields, which typically boost lending margins, regional banks were the market’s biggest drag, leading to the downside.
NASDAQ: Principal Financial Signature Bank (NASDAQ: PFG), Zions Bancorporation (NASDAQ: SBNY), ZION) were among the day’s biggest losers.
Silvergate Capital Corp., a crypto-bank (NYSE: In contrast, SI), which delayed its annual report and raised concerns about its ability to survive in light of the impact of FTX’s collapse and the crypto market’s decline, extended losses after plunging 55%.
On the day, utilities and consumer staples were among the top gainers, helped by a 5% increase in Kroger’s stock price.
Kroger, Inc. KR) gave guidance that was better than expected, which made up for the mixed fourth-quarter results because revenue fell short of Wall Street expectations.
NYSE: Macy’s The department store chain’s shares rose more than 10% after M) reported quarterly earnings that exceeded expectations.
In a note, Goldman Sachs stated, “We were encouraged to see the well-controlled inventory balance entering the year, and believe that strong momentum and clean stocks suggest an opportunity for Macy’s to generate a higher profit for the year than peers.”
Salesforce, Inc. Wedbush stated that the cloud-based software company’s fourth-quarter results and guidance that exceeded Wall Street estimates “will silence the doubters” led to a more than 12 percent increase in CRM)’s stock price. Activist investor interest in CRM continues.
NASDAQ: Advanced Micro Devices On news that activist investor Dan Loeb’s Third Point had acquired a passive stake in the chipmaker, AMD gained 2%.
Additionally, Tesla (NASDAQ: At its investor day on Wednesday, TSLA) presented plans to cut costs, but it did not update investors on its plans to introduce a more affordable electric car, causing its shares to fall more than 6%.
According to a note published by Goldman Sachs, “[W]e believe many investors were hoping for more specifics on when a third generation vehicle could be shipping, and therefore the lack of clarity beyond the comment that they’re working as quickly as they can and it could be in the next couple of years is likely to be viewed as a disappointment to some.”
