Tag Archives: Hawkish

Business

Bitcoin, Ethereum, Dogecoin Rise Despite Hawkish Fed: Analyst Says Wait For ‘The Bigger Drop’ Will Be Longer – Bitcoin (BTC/USD), Ethereum (ETH/USD), Dogecoin (DOGE/USD)

Leave a comment

Bitcoin and Ethereum traded in the green Thursday evening, as the global cryptocurrency market cap rose 4.9% to $943.7 billion at 8:19 p.m. EDT.

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD 4.7% -1.6% $19,386.98
Ethereum ETH/USD 6.6% -9.6% $1,330.52
Dogecoin DOGE/USD 4.2% 1.6% $0.06
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
XRP (XRP) +22.1% $0.5
Chiliz (CHZ) +19.1% $0.3
UNUS SED LEO (LEO) +14.1% ​​$4.92

See Also: How To Get Free Crypto

Why It Matters: Major cryptocurrencies moved in the opposite direction of stocks, which closed lower on Thursday.

The S&P 500 and Nasdaq closed 0.8% and 1.4%, respectively. At the time of writing, U.S. stock futures were seen marginally higher.

Meanwhile, 10-year Treasury yields rose from four-month lows seen in early August as investors expect the U.S. Federal Reserve will continue to maintain its hawkish pose and keep rates higher even if it affects economic growth, reported Reuters.

The yield curve between the 2-year and 10-year treasuries is the most inverted since the year 2000. The inversion reached as far as negative 58 basis points, which shows the rising anxiety about an upcoming recession.

“Bitcoin is doing just fine as the global bond market selloff heats up. Recently, it seems Bitcoin would be sharply lower if Wall Street sees Treasury yields skyrocket and stocks sell-off, but that is not happening. Bitcoin’s bottom could be in place if throughout this market volatility it can hold the $18,000 level,” said Edward Moya, a senior market analyst with OANDA, in a note seen by Benzinga.

Cryptocurrency trader Justin Bennett said that we are likely to see some “bullish reclaims,” namely for Bitcoin. 

“I think everyone will have to wait a while longer for the big drop,” he said on Twitter.

Cryptocurrency trader Michaël van de Poppe said that the total market capitalization for cryptocurrency has regained the 200-week moving average, which is a positive for the markets.

Jon Haspel, a senior institutional trading associate at BlockFi, tweeted that irrespective of the prevailing macro landscape, Ethereum has seen pronounced selling pressure due to numerous factors such as decreasing whale wallets, miner selling and Ethereum Pow (ETHW) trade.

Meanwhile, the price ratio of XRP/BTC hit a one-year high of 0.000025 as optimism builds around Ripple settling a lawsuit with U.S. Securities and Exchange Commission, said Santiment.

“Active shark & whale addresses holding 1m to 10m [XRP] have been in an accumulation pattern since late 2020,” said the market intelligence platform on Twitter.

Read Next: Broken Record? JPMorgan CEO Continues Rant On Bitcoin, Calls It A ‘Ponzi Scheme’



Read original article here

Business

Bitcoin (BTC/USD), Ethereum (ETH/USD), Dogecoin (DOGE/USD) – Bitcoin, Ethereum, Dogecoin Flat As Central Banks Stay Hawkish: Why This Trader Says Be Careful About ETH Bounce

Leave a comment

Ethereum’s gains were higher than Bitcoin’s, even as the two coins remained largely flat on Thursday evening, with the global cryptocurrency market cap rising 0.7% to $983.3 billion at 8:20 p.m. EDT.

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD 0.03% -3.7% $19,355.19
Ethereum ETH/USD 0.3% -3.6% $1,638.85
Dogecoin DOGE/USD 0.01% -1.9% $0.06
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
Polymath (POLY) +105.4% $0.37
OKB (OKB) +17.9% $16.6
Luna Classic (LUNC) +17.04% ​​$0.00052

See Also: Best Crypto Debit Cards

Why It Matters: Major coins were largely muted, in line with other risk assets. Stock futures were trading flat at the time of writing.

On Thursday, the European Central Bank raised interest rates by 75 basis points as expected and revised inflation projections to average 8.1% in 2022.

The same day, U.S. Federal Reserve Chair Jerome Powell cautioned strongly against loosening the monetary policy prematurely at the Cato Institute, a libertarian think tank, reported CNBC. 

“I can assure you that my colleagues and I are strongly committed to this project and we will keep at it until the job is done,” he said.

The Fed’s next policy meeting is slated for Sept. 20-21.

“Bitcoin is giving back some of yesterday’s gains as risky assets declined following a double dose of hawkishness from Fed Chair Powell and ECB president Lagarde,” said OANDA senior market analyst Edward Moya, in a note seen by Benzinga.

“Bitcoin is trying to stabilize above the $19,000 level but that will be hard given consistent messaging about taking rates above the terminal rate needed by the major central banks.”

Michaël van de Poppe tweeted Bitcoin is “going so far so good” but needs continuation above the $19,500 mark.

Justin Bennett said earlier on Thursday that he would exercise caution on Ethereum as “volume is trailing off, and there’s nothing structurally bullish about markets like Ethereum.”

Glassnode said on Twitter that Ethereum speculative action continues with over $6.12 billion in outstanding Open Interest for Call Options. 

The Put options stand at $1.5 billion, which makes a Put/Call Ratio of 0.25, according to the on-chain analysis firm.

Read Next: Bitcoin Is Markets’ Early Warning Alarm, Says Bloomberg Analyst



Read original article here

Business

Stock Futures Fall After Powell’s Hawkish Remarks

Leave a comment

U.S. stock futures fell and Treasury yields jumped to start the week, as investors remained rattled by the Federal Reserve’s resolve to keep fighting inflation even if it causes some economic pain.

Futures tied to the S&P 500 dropped 0.8%, putting the benchmark index on pace to extend its 3.4% loss on Friday. Contracts for the Dow Jones Industrial Average lost 0.8%, while those tied to the tech-focused Nasdaq-100 sank 1%.  

Monday’s declines before the opening suggest U.S. stocks will likely see another turbulent day of trading, as traders assess Fed Chairman

Jerome Powell’s

comments from last week. Speaking Friday in Jackson Hole, Mr. Powell said the U.S. central bank must continue raising interest rates and keep them at an elevated level, until it is confident inflation is under control.

The comments unsettled investors, many of whom had begun to wager that this year’s historically large rate increases were in the rearview mirror. Many had expected that, starting in September, the Fed would slow the magnitude of its interest-rate increases, until eventually cutting rates next year.

Friday’s comments reshuffled those expectations. On Monday, federal-funds futures, used by traders to place wagers on the course of interest rates, showed a nearly 65% chance that the central bank would lift interest rates by 0.75 percentage point for a third time in a row in September. That is up from 28% a month ago, according to CME Group data.

“The market kind of got ahead of itself over the last three, four weeks or so…in terms of pricing in a possible Fed pivot to a more dovish stance,” said Clara Cheong, a global market strategist at J.P. Morgan Asset Management.

Investors’ growing jitters stand to further unwind a rally that had sent stocks climbing from their 2022 lows reached in June. Already, all three major U.S. indexes have seen their August gains wiped out. Many investors are betting on further pain ahead, with net short positions against S&P 500 futures recently reaching levels not seen in two years.

In premarket trading Monday, many of the S&P 500’s biggest losers were companies that had risen sharply amid the stock market’s summer rebound.

Tesla

fell 1.7%, while

PayPal Holdings

lost 1.6%. Economically sensitive stocks also took a beating before the opening bell, with

Las Vegas Sands,

Alaska Air Group

and Royal Caribbean all falling 1.8% or more. 

“It’s game-changing. We’re coming from a world where people were looking for a Fed pivot, but they got a pivot in the wrong direction,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers, who noted he began lowering his exposure to stocks last week as volatility rose. “We are not defensive yet, but our exposure remains cautious.”

Investors’ risk-off sentiment rippled around the globe and across asset classes. The pan-continental Stoxx Europe 600 dropped 0.9%, following indexes in Asia lower. Bitcoin fell 3.5% from its 5 p.m. ET level on Friday to about $19,942 according to CoinDesk.

U.S. Treasury yields climbed further as a selloff in government bonds gathered pace. The yield on the two-year Treasury note, which is more sensitive to near-term Fed policy expectations, rose to 3.435%, from 3.391% Friday. 

The 10-year Treasury yield rose to 3.091%, from 3.034%. High U.S. short-term yields relative to long-term yields—also known as an inverted yield curve—have in the past signaled a significant risk of a recession.

Oil prices rose, with Brent crude gaining 1.2% to $100.24 a barrel, buoyed by expectations of supply curbs.

In Asia, major indexes ended mostly lower. Japan’s Nikkei 225 fell 2.7%, South Korea’s Kospi dropped 2.2% and Hong Kong’s Hang Seng lost 0.7%. The Shanghai Composite was a rare bright spot, rising 0.1%.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Dave Sebastian at dave.sebastian@wsj.com

All eyes on a television broadcast of Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Policy Symposium on Friday.



Photo:

Michael Nagle/Bloomberg News

We want to hear from you

By submitting your response to this questionnaire, you consent to Dow Jones processing your special categories of personal information and are indicating that your answers may be investigated and published by The Wall Street Journal and you are willing to be contacted by a Journal reporter to discuss your answers further. In an article on this subject, the Journal will not attribute your answers to you by name unless a reporter contacts you and you provide that consent.

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Jay Powell says Fed will ‘keep at it’ in hawkish inflation speech

Leave a comment

Jay Powell declared the Federal Reserve “must keep at it until the job is done” as he used a speech at Jackson Hole to deliver his most hawkish message to date on the US central bank’s determination to tame surging inflation by raising interest rates.

In a hotly anticipated address, the Fed chair said that successfully reducing inflation would probably result in lower economic growth for “a sustained period”. To do that, interest rates would need to stay at a level that restrains growth “for some time”, he warned.

The US stock market slid sharply after Powell spoke, with the benchmark S&P 500 index falling 2.2 per cent and the tech-heavy Nasdaq Composite declining 2.7 per cent.

Powell predicted there would “very likely be some softening of labour market conditions” and “some pain” for households and businesses. “A failure to restore price stability would mean far greater pain,” he added.

Yields on short-dated US government debt climbed. On the policy-sensitive two-year Treasury note, the yield increased 0.04 percentage points to 3.41 per cent. The yield on the 10-year note — which moves with growth and inflation expectations — was little changed at 3.02 per cent. Yields rise when a bond’s price falls.

Powell’s speech contrasted with his message at last year’s Jackson Hole symposium, when he predicted that surging consumer prices were a “transitory” phenomenon stemming from supply chain-related issues. It has since become clear that inflation is demand-driven and therefore likely to persist for longer.

“We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored,” Powell said.

The Fed chair harked back to the lessons of the 1970s, when the US central bank presided over a period of turmoil after it made several policy blunders and failed to rein in inflation. That forced Paul Volcker, who became Fed chair in August 1979, to choke the economy and cause more pain than would have been necessary if officials had acted more quickly.

“The historical record cautions strongly against prematurely loosening policy,” said Powell.

The main lesson of that period was that “central banks can and should take responsibility for delivering low and stable inflation,” he said, reiterating the Fed’s “unconditional” commitment to tackling price growth.

He also highlighted the risk posed by inflation remaining too high for too long, setting off a chain reaction with people expecting further price increases.

“The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched,” he warned.

Financial markets had rallied in recent weeks amid expectations the Fed might ease up its efforts to damp demand as economic data deteriorated further and concerns grew over the risks of being too heavy-handed.

Last month the central bank delivered its second consecutive 0.75 percentage point rate rise, bringing the federal funds rate to a new target range of 2.25 per cent to 2.50 per cent.

Fed officials are debating whether a third increase of the same magnitude will be necessary at its meeting in September, or if they should opt for a half-point rise instead.

The comments from Powell prompted traders to shift wagers on how high policymakers will ultimately raise interest rates. Futures markets on Friday implied that the Fed would lift the federal funds rate as high as 3.82 per cent by next March.

Futures markets also suggested that traders accept that the central bank could keep that rate higher for longer. It marked a noticeable deviation, given investors had been reluctant to bet that the Fed would keep interest rates high in the face of a slowing economy.

“The Fed is willing to take more short-term pain to ensure the longer-term gain of price stability,” said Ashish Shah, the chief investment officer of public investing at Goldman Sachs Asset Management. “You are unlikely to see a dovish pivot into weaker growth. They would rather make sure that inflation and inflation expectations are sufficiently anchored.”

Powell said at some point it would be appropriate to slow the pace of interest rate increases. But he dismissed recent data showing a slight easing of inflation as insufficient, adding: “A single month’s improvement falls far short of what the committee will need to see before we are confident that inflation is moving down.”

Most officials say they can bring inflation under control without causing a painful recession. That runs counter to the consensus view among Wall Street economists, who predict at least a mild recession some time in the next year.

Economists also expect the US unemployment rate to rise beyond the 4.1 per cent broadly anticipated by FOMC members and regional bank presidents in June. The unemployment rate, a bright spot as the economic picture darkens, hovers at a multi-decade low of 3.5 per cent.

Are we heading towards a global recession? Our economics editor Chris Giles and US economics editor Colby Smith discussed this and how different countries are likely to react in our latest IG Live. Watch it here.



Read original article here

Business

Hawkish Fed remarks dent global stocks

Leave a comment

Minneapolis Fed President Neel Kashkari on Tuesday reiterated the central bank’s commitment to bringing inflation under control through monetary policy tightening, and said his biggest fear is that the persistence of price pressures is underestimated.

Anjali Sundaram | CNBC

LONDON — European markets were muted on Wednesday as new hawkish comments from a U.S. Federal Reserve policymaker kept investors hesitant.

The pan-European Stoxx 600 index hovered around the flatline by mid-morning. Basic resources fell 1.4% while household goods added 0.5%.

Minneapolis Fed President Neel Kashkari on Tuesday reiterated the central bank’s commitment to bringing inflation under control through monetary policy tightening, and said his biggest fear is that the persistence of price pressures is underestimated.

The comments came as markets prepare for a much-anticipated speech from Fed Chairman Jerome Powell on Friday addressing the central bank’s tightening path, following its annual economic symposium in Jackson Hole, Wyoming.

Shares in Asia-Pacific were mixed on Wednesday after the Dow Jones Industrial Average and S&P 500 posted a third consecutive day of a losses in the previous session. China’s Shenzhen Component led losses regionally.

U.S. stock futures were flat in early premarket trading on Wednesday as Wall Street tries to halt further losses ahead of Powell’s speech on Friday.

Back in Europe, investors will be perusing the European Central Bank’s accounts of its latest monetary policy discussions, due to be published on Wednesday.

Having hit a 20-year low of $0.9901 on Tuesday, the euro recovered slightly overnight to trade at $0.9950 by mid-morning in London on Wednesday.

Read original article here

Business

Was Fed’s Powell dovish or not? 4 key takeaways from Wednesday’s press conference

Leave a comment

Investors reacted as if Fed Chairman Jerome Powell’s press conference Wednesday was dovish, but many economists think it was on the hawkish side of the street.

Here are some of the key takeaways from Powell’s hour-long discussion with reporters about the state of the economy and central bank policy:

Read: Fed jacks up rates to combat highest inflation in 41 years

You say ‘dovish’ and I say ‘hawkish’

After Powell spoke, stock prices
DJIA,
+1.37%

SPX,
+2.62%
rose sharply and bond yields
TMUBMUSD02Y,
2.984%
declined more at the short end than the long end, clear signs the market thought Powell was dovish.

But Robert Perli, head of global policy at Piper Sandler, disagreed with this conclusion.

“The press conference was hawkish,” he said.

“All Powell could do at the press conference today was talk about how inflation was too high, how the Fed is determined to bring it down, and implicitly how he would be willing to tolerate a recession if that’s what’s needed to get the job done,” Perli said.

The market latched on to Powell’s statement that slowing down from the pace of 0.75-percentage-point rate hikes will likely be appropriate “at some point.” Perli said this is “obvious” as the Fed can’t continue on that pace forever.

The market also liked when Powell said the Fed was moving to a new “meeting-to-meeting” phase, perhaps believing that a peak in interest rates is near.

Perli said that’s a misreading and Powell doesn’t want to give guidance because there is so much uncertainty.

Scott Anderson, chief economist at Bank of the West, said the lack of forward guidance from the Fed could increase interest-rate and stock-market volatility around important U.S. data releases, especially on inflation “as investors try to determine what it might mean for the pace of additional rate hikes and the terminal peak for rates in the current tightening cycle.”

Powell ‘bobs and weaves’ on recession

Powell managed to “bob and weave” around the questions of recession, said Josh Shapiro, chief U.S. economist at MFR.

Powell said the Fed wasn’t trying to create a recession and did not expect one, and also that we are not currently in one. He refused to categorically state how it would affect the Fed’s policy path if one materialized, Shapiro said.

The Fed chairman said there was still a path to bring inflation down while sustaining a strong labor market.

“We continue to think that there is a path [to a soft landing]. We know the path has clearly narrowed…and may narrow further,” he said.

Powell said the Fed is determined to bring inflation down, and this likely means a period of “below-trend economic growth and some softening in the labor market conditions. “

What about September?

Powell kept the door open for another “unusually large” 0.75-percentage-point hike in September, but said it would depend on the data.

Carl Tannenbaum, chief economist at Northern Trust, noted that Powell suggested that the year-end fed funds rate would be in the range of 3.25%-3.5%. That is another 100 basis points higher, which the Fed might prefer to accomplish with a 50-basis-point increase followed by two 25-basis-point hikes, rather than going from 75 basis points in September, to 25, then to zero. Powell “sounded marginally less hawkish to me,” he said.

Balance-sheet plans

Powell said the Fed’s program to shrink its balance sheet is working and markets “should be able to absorb this.” He said the plan was on track and could take two to two-and-a-half years.

Some economists have starting to forecast the Fed will end the “quantitative tightening” program next year.

Read original article here

Business

Almost $100M exits US crypto funds in anticipation of hawkish monetary policy

Leave a comment

Institutional investors offloaded $101.5 million worth of digital asset products last week in ‘anticipation of hawkish monetary policy’ from the U.S. Federal Reserve according to CoinShares.

U.S. inflation rates hit 8.6% year-on-year at the end of May, marking a return to levels not seen since 1981. As a result, the market is expecting the Fed to take considerable action to reel in inflation, with some traders pricing in three more 0.5% rate hikes by October.

According to the latest edition of CoinShares’ weekly Digital Asset Fund Flows report, the outflows between June 6 and June 10 were primarily led by investors from the Americas at $98 million, while Europe accounted for just $2 million.

Products offering exposure to crypto’s top two assets, Bitcoin (BTC) and Ethereum (ETH), accounted for nearly all outflows at $56.8 million and $40.7 million a piece. The month-to-date figures also paint a grim figure at $91.1 million worth of outflows for BTC products and $72.3 million in total outflows for ETH products.

“What has pushed Bitcoin into a “crypto winter” over the last six months can by and large be explained as a direct result of an increasingly hawkish rhetoric from the US Federal Reserve.”

While CoinShares suggested that Bitcoin has been pushed into a crypto winter, the year-to-date (YTD) inflows for BTC investment products still stand at $450.8 million. In comparison, funds offering exposure to ETH have seen hefty YTD outflows of $386.5 million, suggesting the sentiment amongst institutional investors still heavily favors digital gold.

The report also highlighted that the total assets under management (AUM) for Ether funds have “fallen from its peak of US$23bn in November 2021 to US$8.7bn” as of last week.

Notably, it appears that the institutional investors offloaded their BTC and ETH products before most of the latest price carnage happened to both assets.

Related: Bitcoin price drops to lowest since May as Ethereum market trades at 18.4% loss

According to data from CoinGecko, between June 6 and June 10, the price of BTC and ETH dropped 4.7% and 5.9% each. However, since June 11, BTC and ETH have plunged around 25.7% and 33.2% respectively.

Apart from BTC and ETH outflows, multi-asset funds saw outflows of $4.7 million, and Short Bitcoin products posted minimal outflows of $200,000. At the same time, investors also “steered clear of adding to altcoin positions.”

Flows by Asset: CoinShares

Read original article here

Business

Dow Jones Futures Rise After Market Rally Fizzles On Hawkish Fed Signal; What To Do Now

Leave a comment

Dow Jones futures rose modestly early Wednesday, along with S&P 500 futures and Nasdaq futures. The stock market rally opened solidly higher Tuesday as the consumer price index raised hopes that inflation is peaking, but the major indexes reversed lower as a top Fed official signaled aggressive rate hikes and other measures are ahead.




X



Crude oil prices jumped as Shanghai eased Covid lockdowns in some areas, though the city remains largely shut down. Shanghai cases continued to rise on Tuesday. There is growing speculation that the city, and much of its industry, could be shut down through mid-May.

Dow Jones Futures Today

Dow Jones futures rose 0.5% vs. fair value. S&P 500 futures advanced 0.5% and Nasdaq 100 futures climbed 0.7%.

Crude oil prices edged higher.

The 10-year Treasury yield rose 2 basis points to 2.75%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

JPMorgan Chase (JPM) and Delta Air Lines (DAL) report early Wednesday, kicking off bank and airline results as earnings season gets underway. JPM stock and DAL stock are well off highs, along with most of their peers.

Tesla (TSLA) and Apple stock rebounded Tuesday morning, breaking back above their 21-day and 50-day lines, respectively, within handles. But Apple (AAPL) and Tesla stock slashed gains as the overall market fizzled.

Shell (SHEL) and Devon Energy (DVN) flashed buy signals as a jump in crude oil prices fueled energy stocks. Defense giant Raytheon Technologies (RTX) flirted with an early entry.

Tesla stock is on IBD Leaderboard and IBD 50. RTX stock is on SwingTrader. DVN stock is on the IBD Big Cap 20.

The video embedded in this article analyzed the market action and reviewed Shell stock, Devon Energy and Raytheon.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally tried to bounce Tuesday, but not for long.

Before the open, the Labor Department reported consumer inflation jumped to 8.5% in March, its hottest rate since 1981. But core inflation, though hitting a long-term high of 6.5%, came in slightly below estimates. Along with falling gasoline prices and tougher year-over-year comparisons, there is a growing hope that March marked the inflation peak. That could ease pressure on consumers and mean the Federal Reserve doesn’t have to raise rates quite as much.

But any Fed shift would be down the road. Fed Gov. Lael Brainard said after Tuesday’s CPI inflation report that the Fed will move “expeditiously” to raise rates and reiterated that a decision to reduce the balance sheet could come “as soon as May” with actual cuts starting in June.

The Dow Jones Industrial Average closed down 0.3% in Tuesday’s stock market trading. The S&P 500 index and Nasdaq composite also gave up 0.3%. The small-cap Russell 2000 climbed 0.3%.

U.S. crude oil prices leapt 6.7% to $100.60 a barrel.

The 10-year Treasury yield fell 5 basis points to 2.73%, though off intraday lows.

Top ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.6%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 0.8%. The iShares Expanded Tech-Software Sector ETF (IGV) sank 0.7%. The VanEck Vectors Semiconductor ETF (SMH) retreated 0.5%.

SPDR S&P Metals & Mining ETF (XME) popped 2.5% and the Global X U.S. Infrastructure Development ETF (PAVE) edged up 0.4%. U.S. Global Jets ETF (JETS) rose 0.8%. SPDR S&P Homebuilders ETF (XHB) dipped 0.3%. The Energy Select SPDR ETF (XLE) popped 1.7%, with DVN stock an XLE holding. The Financial Select SPDR ETF (XLF) lost 1.1%. The Health Care Select Sector SPDR Fund (XLV) gave up 1%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) closed flat and ARK Genomics ETF (ARKG) climbed 0.9%. Tesla stock remains the No. 1 holding across Ark Invest’s ETFs.

Five Best Chinese Stocks To Watch Now

Shell Stock

Shell stock rose 1.2% to 55.99, but faded from a new high of 56.73. Shares of the integrated energy giant have been testing a 56.23 flat-base buy point. The relative strength line has been hitting highs for several days, reflecting SHEL stock’s outperformance vs. the S&P 500 index.

Devon Stock

DVN stock climbed 3.7% to 62.26, rebounding from the 21-day moving average and near the 10-week line. Intraday, shares hit 63.42, just clearing a short consolidation after a big run. Investors could buy Devon stock now from the moving averages or after topping Tuesday’s intraday peak.

Raytheon Stock

RTX stock rose to 103.92 intraday, just below a 104.44 flat-base buy point and above an early entry of 103.97, just above the March 25 high. But Raytheon stock faded with the market, closing up 0.5% to 102.60. Shares are just 4.1% above their 10-week line. The RS line for RTX stock has been rising sharply again, right around highs.

The flat base is part of a base-on-base pattern. Raytheon stock and other defense names broke out decisively from longer consolidations at the start of Russia’s Ukraine invasion. They’ve been consolidating for weeks.

Market Rally Analysis

The stock market rally got a strong bounce Tuesday morning following the CPI inflation report, with the Dow Jones and S&P 500 briefly reclaiming their 50-day moving averages. But the major indexes all reversed to close modestly lower, with the Nasdaq staging an outside reversal day after Monday’s sharp losses.

Even at intraday highs, the major indexes weren’t breaking sharp downtrends since late March.

The small-cap Russell 2000 edged up, but came well off highs after hitting resistance at its 50-day line.

Until the Nasdaq regains its 50-day line and the S&P 500 recaptures its 200-day line, the short-term trend will remain negative. Even reclaiming those levels likely would still leave the market uptrend “under pressure.”

But in the here and now, the Nasdaq has given up more than half of its recent gains from its March 14 low.

The energy and commodity sector remain the leading areas. Defense, medicals and some pockets of retail are doing all right. Tech and growth is heavily damaged.

Apple stock and Tesla are among the best-looking growth names, and they don’t look actionable right now. TSLA stock is trying to buck the trend even with Tesla Shanghai shut down since March 28. Tesla earnings for Q1 are due on April 20, but investors will likely focus on short-term prospects and longer-term initiatives. Apple earnings come on April 28.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

Aside from the commodity, defense and medical sectors, there is little reason to be playing this market aside from long-term winning positions. Don’t get sucked into brief rallies, such as Tuesday morning’s pop.

If and when the market has a sustained uptrend, there will plenty of opportunities. So don’t try to fight the market when it’s in a downtrend.

Work on your watchlists. Look for stocks setting up among leading sectors, while also building broader lists that are holding up reasonably well.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

YOU MAY ALSO LIKE:

Catch The Next Big Winning Stock With MarketSmith

Best Growth Stocks To Buy And Watch

IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today

Tesla Vs. BYD: Which Booming EV Giant Is The Better Buy?



Read original article here

Business

Asian Stocks Up, Withstands Bond Tumble Triggered by Hawkish Powell Comments By Investing.com

Leave a comment

© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly up on Tuesday morning, with U.S. and European equity futures falling. Bonds were under pressure as U.S. Federal Reserve Chairman adopted a more hawkish tone on monetary policy.

Japan’s jumped 1.63% by 10:17 PM ET (2:17 AM GMT), with the market reopening after a holiday.

South Korea’s gained 0.66% and in Australia, the rose 1.18%.

Hong Kong’s rose 0.64%.

China’s edged up 0.15% while the fell 0.81%.

U.S. Treasuries extended losses on Monday, which included one of the biggest daily climbs in short-dated yields in the past decade. The gap between five-year and 30-year U.S. yields is near its smallest since 2007. Australian and New Zealand debt were also on a downward trend.

A weaker Japanese yen could bolster exporters’ outlooks in Australia, South Korea, and Japan, where stocks were up.

Powell said the Fed is prepared to hike interest rates by a half percentage point at its next policy meeting if needed. The central bank hiked its interest rate to 0.5% as it handed down its latest during the previous week.

Movements in the bond market remained a focal point for some investors, who worried about an economic downturn.

“If Powell is reinforcing that they are going to address inflation, that they’ve made mistakes, that their expectations of inflation were incorrect, just admitting that and saying that we’re ready to do everything it takes, is definitely reassuring for equity investors,” Main Street Asset Management chief investment officer Erin Gibbs told Bloomberg.

Derivative traders on Monday priced in about seven and a half rate hikes at the remaining six Fed meetings for 2022.

“For the long term, 2.3% on the 10-year is not such a high figure at all. What spooks the market is when you have very quick moves, such as what we’re having now,” Federated Hermes (NYSE:) Inc. senior equity strategist Linda Duessel told Bloomberg.

While Fed tightening might cause disruptions throughout the yield curve, the gap between the three-month and 10-year tenors is still steeply upward sloping, supporting the view that the U.S. economy remains strong, she added.

In contrast to the Fed, expectations are growing that the People’s Bank of China will loosen monetary policy to support the economy as the country continues to deal with its latest COVID-19 outbreak.

China’s State Council pledged stronger monetary policy support but cautioned against flooding the market with liquidity on Monday, according to local media. The government also vowed to avoid measures that can hurt market sentiment.

European Central Bank President Christine Lagarde will speak at the BIS innovation summit later in the day, with Powell and Bank of England Governor Andrew Bailey following a day later.

Meanwhile, U.K. Chancellor Rishi Sunak will release his “spring statement” on the budget on Wednesday. U.S. President Joe Biden will attend a NATO emergency summit in Brussels a day later.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Read original article here

Business

A ‘firestorm’ of hawkish Fed speculation erupts following strong U.S. inflation reading

Leave a comment

How hawkish will the Federal Reserve be this year?

At the moment, Wall Street economists seem to be telling their clients “more hawkish than we thought five minutes ago.”

The strong U.S. consumer inflation data reported Thursday has set off what looks like a chain reaction of upward revisions to projected interest rates rises and where the Fed is headed with monetary policy.

Fed watchers are talking seriously about an “emergency” interest rate hike before the Fed’s next formal meeting on March 16.

The consumer price index rose 0.6% in January, with broad based gains. The year-over-year rate rose to 7.5%, the highest level in 40 years.

Read: Consumer price inflation increases sharply in January

In the wake of the data, Goldman Sachs said it now sees seven consecutive 25 basis point rate hikes at each of the remaining Fed policy meeting this year. The investment bank’s earlier prediction was five hikes.

Economists at Citi said that their base case is a now for a 50 basis point hike in March followed by quarter point hikes in May, June, September and December.

Marc Cabana, head of U.S. rates strategy at BofA Securities, told Bloomberg Radio that it is very likely the Fed is going to raise rates by 50 basis points in March and “who knows, maybe even 50 in May.”

The talk about an inter-meeting rate hike before March 16 erupted late Thursday after St. Louis Fed President James Bullard said was open to having that discussion.

Market analyst Mohamed Ed-Erian said the frenzy of speculation is a sign the Fed has lost control of the policy narrative. He said he didn’t want to see the Fed take aggressive moves because the market will price in aggressive moves again and again.

“This is what typically happens in a developing country when a central bank loses control of the policy narrative,” he said.

March Chandler, forex analyst for Bannockburn Global Forex, said it will be difficult for Fed officials to get ahead of the curve of expectations.

It is a strange time for the Fed. The central bank has been slowly “tapering” or reducing the amount of securities is is buying under its quantitative easing program started in the depth of the pandemic. The buying of Treasurys and mortgage backed securities is scheduled to end in mid-March.

Some Fed watchers think the Fed may decide to end these purchases “cold turkey,” with the announcement coming Friday.

Under the Fed’s QE program, the Fed is scheduled to release its schedule for the last month of asset purchases.

“If the Fed releases that calendar at 3 p.m, it is pretty strong forward guidance they’re not going to do an intermeeting hike,” Cabana said.

Cabana said he didn’t expect a rate hike before the March 16 meeting. He suggested that investors who want to bet on an intermeeting hike would be better positioned to play for a 75 basis point hike in March.

However, Robert Perli, head of global policy at Piper Sandler, said the firestorm among Fed watchers felt like “much ado about little.”

“We are first to recognize that inflation is too high for comfort. But what we learned yesterday from both the CPI report and FOMC members doesn’t seem enough to change the policy outlook nearly as much as the market did,” Perli said, in a note to clients.

Three Fed officials were not as hawkish as Bullard in their comments the wake of the CPI report.

Richmond Fed President Tom Barkin told the Stanford Institute for Economic Policy Research on Thursday evening that he would have to be convinced of a need for a 50 basis point rate hike, Reuters said.

In an interview with Market News International, San Francisco Fed President Mary Daly downplayed the chances of a half-a-percentage point hike in March.

And Atlanta Fed President Raphael Bostic told CNBC after the CPI data that he was sticking with his call for four rate hikes this year, including a 25 basis point hike in March.

Tim Duy, chief U.S. economist at SGH Macro Advisors, called these dovish Fed comments “nonsensical.”

“It is just getting to the point where the distance between the Fed’s current position and reality is too wide to ignore any longer,” Duy said, in a note to clients.

U.S. stocks
DJIA,
-0.17%

SPX,
-0.45%
were mixed late morning Friday after a wild week on Wall Street. The yield on the 10-year Treasury note
TMUBMUSD10Y,
2.024%
stayed above 2%, the highest level since 2019.

Read original article here