A slightly positive start for US equities, after yesterday’s strong sell-off. The S&P500 gains 0.3%, the Dow Jones 0.2% and the Nasdaq gains 0.6%, following the worst session of 2023.
The spotlights are on the Federal Reserve minutes due tonight, which will clarify the ideas on the positions of the members of the FOMC regarding the next rate hikes. Indeed, in recent days, macro data and statements by central bank officials have strengthened the prospect of a still restrictive monetary policy to counter high inflation.
Finally, the president of the Fed Bank of St. Louis, James Bullard, said that the US economy is proving more resilient than expected and repeated his call to raise rates up to 5.375%. Some members also opened to a return to tightening above 25 basis points if needed to curb prices.
Dynamics that pushed bond yields upwards, with the two-year bond at its highest since November in the 4.7% area and the ten-year bond over 3.9%. On Forex, the euro/dollar remains in the 1.065 area while the dollar/yen slips to 134.4. Among raw materials, the dollar lost ground to 82.4 dollars a barrel.
As for individual companies, Intel (+2.4%) cut its dividend to its lowest level in 16 years in an effort to preserve cash and focus on a corporate turnaround plan.
The company will reduce its quarterly coupon to 12.5 cents per share, down from its current quarterly dividend of 36.5 cents, at an expected cost of more than $6 billion in 2023.
Intel also reiterated its first quarter 2023 guidance that it indicates revenue of between $10.5 billion and $11.5 billion, gross margin of 39% and loss per share of 15 cents (on a non-GAAP basis).