Wall Street is recovering from the more hawkish shock that came from Jerome Powell’s Federal Reserve: the prospect of more aggressive rate hikes in particular supports US bank stocks, which are pointing upward. Well JP Morgan and Bank of America.
At about 3 pm Italian time, the Dow Jones advanced by about 250 points (+ 0.72%), to 34,801 points; the S&P 500 rises 0.60% to 4,487 points while the Nasdaq scores a rise of 0.51% to 13,909 points.
On the Dow Jones, the Nike stock is highlighted, reporting a rally of over 4%, after the US giant of sporting goods published a balance sheet for its third fiscal quarter that was better than expected.
Nike’s net income for the three months ended February 28 was $ 1.4 billion, or 87 cents per share, compared to $ 1.45 billion, or 90 cents per share, for the same period last year. The result was better than the 71 cents per share expected by the consensus, according to Refinitiv data. Revenue also performed well, up 5% to $ 10.87 billion, from $ 10.36 billion in the same quarter a year earlier, better than analysts’ estimated $ 10.59 billion.
Procter & Gamble rose 1% after the upgrade from Truist, which upgraded the stock’s rating to “buy”, underlining that the consumer goods giant’s fundamentals are underestimated.
Boeing regains its stock after the loss equal to -3.6% on the eve, caused by the news of the crash of the Boeing 737 of the airline China Eastern Airlines.
Yesterday, the Chinese aviation authority reported that a Chinese airline Boeing 737 passenger plane crashed with 132 people on board, including 123 passengers and nine crew members.
US Treasury rates remain in the spotlight, with ten-year rates which, following the words of Jerome Powell, Fed number one, jumped to 2.359%, a new record since May 2019.
Powell made it clear yesterday that inflation in the US is too high and that monetary tightening of more than 25 basis points may be required in one meeting or at multiple meetings.
The words of the central banker led the markets to bet that, in the next meeting of the FOMC – the monetary policy arm of the Fed – US rates will be raised by 50 basis points, after the first hike since 2018 announced last Wednesday, March 16, equal to 25 basis points, which brought the cost of money to the range between 0.25% and 0.50%.
The Dow Jones Industrial Average thus lost 201.94 points (-0.6%), the S&P 500 closed down around par and the Nasdaq fell 0.4% to 13,838.46 after slipping to intraday lows. up to -1.5%.
Goldman Sachs reported yesterday that it revised its US rate forecasts upwards, estimating two 50 basis point monetary tightenings at meetings of the FOMC, the Fed’s monetary policy arm, in May and June. And UBS chief economist Jonathan Pingle stressed that he believes that “the odds of a 50 basis point rate hike are increasing.”
In the last few hours, the geopolitical tensions provoked by the invasion of Ukraine by Russia have further intensified.
The Russian Ministry of Foreign Affairs has announced that it has summoned the American ambassador to Moscow John Sullivan to formally protest the United States, after American President Joe Biden called his Russian counterpart Vladimir Putin “a war criminal”.
Biden’s accusation, the Russian Foreign Ministry underlined, “has brought relations between Russia and America to the brink of rupture”.