The hope of a peace agreement between Russia and Ukraine triggers global equity buys on the day Jerome Powell’s Fed hikes fed funds rates for the first time since 2018. The announcement is expected for 7pm Italian time, followed by a briefing in which President Jerome Powell will speak. At about 15.30 Italian time, the Dow Jones jumped by 517.72 points (+ 1.54%), to 34.062 points; the Nasdaq advanced by 2.76% to 13.305, the S&P 500 is + 1.88% at 4.342 points.
Great is the trepidation for the Fed’s dot-plot and the updated forecasts on the trend of GDP and inflation made in the USA, in a global economic context that has suddenly changed face with the invasion of Ukraine by Vladimir’s Russia Putin.
Economists predict that the Fed will raise fed funds rates today from the current zero to 0.25% range, by 1/4 percentage point.
From the dot plot, according to the strategists, the intention to raise rates by another 5/6 times during this year could emerge.
A CNBC Fed survey found that, according to the economists surveyed, the Fed will raise rates on average this year, 4.7 times to 1.4%, proceeding to further tighten up to 2% by the end of the year. 2023.
Almost half of the respondents said they believe that the central bank will proceed with 5-7 rate hikes in 2022. On the other hand, the latest data on the consumer price index, an important thermometer of US inflation, indicated a further prices flared up at an annual rate of 7.9%, a new record in the last 40 years.
“I think the Fed will be a little more hawkish than the markets predict, a factor that will be difficult to digest, especially on the part of fixed income markets,” Jefferies chief market strategist David Zervos commented to CNBC. it could digest (the grip) a little better, but it will be a difficult toad to swallow. ”
In yesterday’s session, the Dow Jones Industrial Average rose 599.10 points (+ 1.82%), to 33,544.34 points; the S&P 500 index closed up 2.14% to 4,262.45 while the Nasdaq Composite jumped 2.92% to 12,948.62. US 10-year Treasury rates are up 2.179%.
Investors’ attention continues to focus on the war between Ukraine and Russia.
In a speech to the nation yesterday, Ukrainian President Volodymyr Zelensky said a ceasefire agreement “seems more realistic”, while Russian Foreign Minister Sergey Lavrov told the BBC that there is “some hope to reach a compromise “.
Russian media confirmed the same hope from Kremlin sources.
Among the best stocks in the S&P 500 index, Micron Technology, Starbucks and Boeing stand out in the premarket.
While the negotiations between Moscow and Kiev are still ongoing, we also look at the rally of the Hong Kong and Shanghai stock exchanges, sparked by the statements of the Chinese Vice Premier Liu He, who has promised measures to support China’s economy and policies too. in support of the capital market. These statements led the Hong Kong Stock Exchange’s Hang Seng Index to rally more than 9% in what was the best session since October 2008.
The ADRs of Chinese Big Techs are on fire on Wall Street, with those of Didi jumping up by over + 44%, those of Alibaba up by over + 21% and JD.com over + 28%.
The data on retail sales, which rose by 0.3% in February, was released today from the US macroeconomic front, slightly below the + 0.4% expected by the consensus. US 10-year Treasury rates are up 2.167%.