Market Outlook Powell testimony tanks stock market

 

US Markets U.S. markets fell on Tuesday after Federal Reserve Chair Jerome Powell gave testimony to Congress.  Powell said the Fed may need to increase the pace of interest rate hikes and that high rates will likely continue for longer than anticipated.  He believes unemployment will need to rise before inflation returns to its target figure.  Airline stocks were one of the few industries to rise after the U.S. Department of Justice announced a lawsuit to prevent JetBlue from acquiring Spirit Airlines.  The current 10 Year U.S. Treasury yield is set at 3.96960% Dow Jones  32,856.46 -1.72% S&P 500  3,986.37 -1.53% Nasdaq  11,530.33 -1.25% Russell 2000 1,878.72 -1.11% *Stock Market data as of the last closing bell. Data received directly from the reference indexes through ICE Data Services. Do you not understand any of these figures?

Canadian Markets According to a report from Mortgage Professionals Canada, a record-high number of Canadians think they will be priced out of the housing market.  33% of Canadians believe they won't be able to afford a home, up from 18% a year ago.  14% of first-time homeowners report difficulties meeting their monthly payments.  47% of homeowners say they may be unable to continue paying off their mortgages due to higher interest rates.  TSX  20,275.54 -1.17% *Canadian stock prices are as of the last close. Data received directly from the references indexes through ICE Data Services

European Markets European markets closed down on Tuesday after falling following Jerome Powell's testimony. Stocks were flat in Europe earlier in the trading session but fell after Powell spoke to finish down 0.8%.  Mining stocks dragged down markets with a 2.5% drop. All sectors of the Stoxx 600 ended in the red on Tuesday.  HelloFresh was the worst-performing stock. The German meal-kit company lost nearly 10% after releasing lower-than-expected forecasts for 2023.  Euro STOXX 50  4,278.96 -0.81% UK (FTSE 100)  7,919.48 -0.13% Germany (DAX)  15,559.53 -0.60% France (CAC 40) 7,339.27 -0.46% *European stock prices are as of 7 am ET. Data received directly from the reference indexes through ICE Data Services.

Asian Markets Markets in Asia were mixed on Tuesday, in anticipation of Powell's testimony, which took place overnight in Asian time zones.  Stocks in Australia closed down after the Reserve Bank of Australia raised interest rates.  Chinese stocks fell. The Hang Seng, Shanghai Composite, and Shenzhen Component were all down on the day.  Exports in China fell by 6.8% from January to February, well below the 9.4% expected by analysts.  S&P Asia 50 4,691.55 -0.37% Japan (Nikkei 225) 28,309.16 0.25% South Korea (KOSPI) 2,463.35 0.03% China (Hang Seng) 20,534.48 -0.33% India (SENSEX) 60,224.46 0.69% *Asian stock prices are as of 7 am ET. Data received directly from the reference indexes through ICE Data Services.

Commodities Oil prices were down after Jerome Powell indicated that the Fed may increase the pace of interest rate hikes.  Brent crude lost 3.4% on Tuesday and U.S. West Texas Intermediate was down 3.6%.  Oil prices fell because higher interest rates would strengthen the U.S. Dollar, making crude more expensive for foreign buyers, which will likely put downward pressure on demand.  U.S. crude inventory data due out later today is expected to show that stockpiles have increased for the past 11 weeks.  Oil (NYSEARCA:OIL) 29.44 -3.79% Gold (NYSEARCA:GLD) 168.62 -1.75% Silver (NYSEARCA:SLV) 18.45 -4.50% Corn (NYSEARCA:CORN) 25.12 -0.51% Lumber (NASDAQ:WOOD) 72.85 -1.91% *Commodity prices are as of 7 am ET. Data from MarketWatch. To understand why investors track the prices of these commodities,.

Currency Exchange Rates The U.S. Dollar saw significant gains in response to Powell's testimony as further interest rate hikes will strengthen the USD.  The odds of a 50-basis-point interest rate hike this month rose from 22% early in the day to 60% at the end of trading.  The U.S. Dollar Index gained 1.3% on the day to reach its highest point since Dec. 6.  The Australian Dollar lost more than 2% against the USD following Powell's comments and a new rate hike by the Australian central bank.  UK(GBP) £0.85 1.68% Europe (EURO) €0.95 0.73% Canada (Canadian Dollar) $1.37 1.03% Japan (Yen) ¥137.11 0.82% *Exchange rates as of 7 am ET. Data from Morningstar Financial Research. To understand why we track these currencies and the differences between them, .

Cryptocurrency Bitcoin was up on Tuesday morning before falling in response to Powell's testimony.  Bitcoin had a close correlation with U.S. equities yesterday, falling 1.6%, in line with the 1.7% decline of the tech-heavy Nasdaq. Some analysts believe that the uncertainty surrounding U.S. monetary policy accounts for much of the volatility in cryptocurrency markets.  A U.S. judge has ruled that Binance.US can proceed with its acquisition of Voyager despite an attempt from the SEC to block the deal.  Bitcoin $22,088.30 -1.55% Ethereum $1,549.33 -1.07% Litecoin $85.42 -2.24% Bitcoin Cash $120.80 -2.60% *Exchange rates as of 7 am ET. Data from Morningstar Financial Research. To understand why we track these currencies and the differences between them, .