Wednesday Afternoon Market Recap
Wednesday Afternoon Market Recap:
U.S. equity markets finished mixed.
Economic Indicators
- None.
Macro Commentary
- Minutes from the Federal Reserve's February meeting showed that the central bank is taking cautious steps in its rate policy. It believes that inflationary risk outweighs the possibility of tightening rates too far.
- St. Louis Fed President James Bullard reiterated that he expects more rate hikes. He thinks a soft-landing could be imminent even if the central bank raises rates to at least 5.375% given the strength of the labor market.
- Investors increasingly believe that the Fed will be forced to raise interest rates to a higher peak and hold them at that level for much of the year. According to a survey of economists by Bloomberg, forecasters raised projections for the personal consumption expenditures price index. The index anticipates Friday's January report will show inflation remained stubbornly high to start the year.
Within the S&P 500 Index, nine of the 11 sectors finished lower...
European equity markets finished mostly lower.
Economic Indicators
- The Institute for Economic Research's German business expectations for February rose to 88.5, improving for the fifth month in a row. Investor sentiment also rose off the heels of greater optimism within the energy and services sectors.
- French business confidence for February showed a slight improvement over the previous month with confidence growing most notably in the services and retail sectors.
Macro Commentary
- European Central Bank ("ECB") President Christine Lagarde said its committed to bringing inflation growth back to target. And it will raise interest rates by 50 basis points in March to 3%.
- Investors are increasing bets that the ECB will raise interest rates to an all-time high following a multitude of better-than-expected economic data points from the region.
Asian equity markets finished lower.
Economic Indicators
- Australia's fourth-quarter wage price index growth was weaker than anticipated, falling compared with the third quarter, and taking pressure off the central bank to raise interest rates.
Macro Commentary
- China has urged state-owned firms to end dealings with the four biggest international accounting firms, furthering the decoupling of international relations between itself and the U.S. within certain competitive private sector areas.
- Chinese President Xi Jinping is said to be preparing for a summit in Moscow with Russian President Vladimir Putin as part of a push for peace talks with Ukraine.
- Bank of Japan board member Naoki Tamura said it will need to review monetary policy in the near future, stoking speculation of pending interest-rate hikes.
(Narratives written as of local market close.)
Asset Snapshot
What we're paying attention to this week...
U.S.
- G20 Finance Ministers and Central Bank Governors Meeting (Wednesday – Friday)
- Chicago Fed National Activity Index for January (Thursday)
- GDP for 4Q (Thursday)
- Fed's Jefferson Speaks (Friday)
- Personal Consumption Expenditure data for January (Friday)
Europe
- G20 Finance Ministers and Central Bank Governors Meeting (Wednesday – Friday)
- Bank of England's ("BOE") Mann Speaks (Thursday)
- Germany – Gfk Consumer Confidence Survey for March (Friday)
- France – Consumer Confidence Survey for February (Friday)
- BOE's Tenreyro Speaks (Friday)
Asia
- G20 Finance Ministers and Central Bank Governors Meeting (Wednesday – Friday)
- South Korea – Producer Price Index for January (Thursday)
- Bank of Korea Rate Policy Decision (Thursday)
- Japan – Consumer Price Index for January (Friday)
(Day of week in parentheses.)
Have a great evening!