Positive global equity markets despite closing in the red on the eve of Wall Street, and pending the announcement of the Fed on rates, scheduled for today.
Yesterday the Dow Jones Industrial Average lost 79.75 points, or -0.24%, to 32,653.20 points, while the S&P 500 lost 0.41% to 3,856.10. The Nasdaq Composite fell 0.89% to 10,890.8 points.
The Hong Kong stock exchange, suspended after the alert launched on the arrival of a cyclone, continued to report a positive trend with the return to trading, with an increase of more than + 2%; weak instead Seoul with a rise of 0.07%, Sidney + 0.14%, the Nikkei index of the Tokyo stock exchange flat with a variation of -0.06%, Shanghai + 1.14%.
In the premarket on Wall Street, futures on the Dow Jones rose by 0.10%, those on the S&P 500 advanced by 0.17%, those on the Nasdaq recorded an increase of 0.25%.
Going back to today’s big market mover, namely Jerome Powell’s Fed rate announcement, the fourth consecutive rate hike of 75 basis points is, in fact, widely discounted: from the CME FedWatch tool, it emerges that traders are betting on a yet another monetary tightening of three quarters of a percentage point with a probability of 80%.
The hike should bring rates from the current range between 3% and 3.25% to the new range between 3.75% and 4%. The question that besieges traders and investors is another: to what extent will US rates be raised? Hope is spreading that the forthcoming monetary tightenings aimed at defeating inflation will be less aggressive.
In recent days, an outlook on what Jerome Powell’s Fed will do came from Goldman Sachs economists led by Jan Hatzius: experts predict a peak for US rates of 5%, after having already revised the estimates upwards on what the US central bank will announce the day after tomorrow, now expecting a tightening of 75 basis points.
They also further revised upwards, by 25 basis points, also the outlook on the next monetary tightening: now Goldman Sachs therefore expects a tightening of 50 basis points in December, of 25 basis points in February, and of another 25 basis points to March.