Market Outlook Fed hikes rates by 25 pbs

 

 

The Figures: The Federal Reserve raised its benchmark interest rate  by 25 basis points on Wednesday. After 10 interest rate hike increases over the past year, policymakers hinted that they may be ready to end the current tightening cycle. The Rates: The Federal Funds rate is now at a range of 5% to 5.25%  and has increased by 5 percentage points since March 2022.  Issues: The speed of increases has significantly impacted markets, causing bonds to be significantly devalued, which has contributed to the collapse of three mid-sized U.S. banks, and negatively impacted the real estate market by increasing borrowing costs.  US Markets The three major U.S. stock indexes fell  after the Federal Reserve raised interest rates on Wednesday. The Dow lost 0.8% on Wednesday, the S&P 500 dropped 0.7%, and the Nasdaq Composite fell 0.5%.  PacWest shares are down more than 50% overnight after it was reported that the bank was seeking a buyer.  Other regional banks, including Zions Bancorporation, and Western Alliance have also lost ground. The current 10 Year U.S. Treasury yield is set at 3.34310%. Dow Jones  33,414.24 -0.80% S&P 500  4,090.75 -0.70% Nasdaq  12,025.33 -0.46% Russell 2000 1,739.28 0.41% Canadian Markets Housing prices in Toronto rose 4% in April , from the previous month, as the Canadian housing market continued to recover.  Prices fell 7.8% from the previous year. The average price of a home in Toronto is now $1,153,269.  House prices in Vancouver increased 2.4% month over month in April but were down 7.4% year over year.  TSX  20,354.68 -0.26% *Canadian stock prices are as of the last close. Data received directly from the references indexes through ICE Data Services European Markets Stocks in Europe closed slightly higher on Wednesday and are expected to fluctuate today, as they react to the Federal Reserve's policy decision. The Stoxx 600 gained 0.3% after shedding some bigger gains made earlier in the day.  The index hit a one-month low on Tuesday after falling 1.2%. Pearson, a British education resource provider, was the top-performing stock in the index on Wednesday, gaining 8.4%.  Chegg fell 48% after the educational technology company said that ChatGPT was negatively impacting its growth.  Euro STOXX 50  4,310.18 0.36% UK (FTSE 100)  7,788.37 0.20% Germany (DAX)  15,815.06 0.56% France (CAC 40) 7,403.83 0.28% *European stock prices are as of 7 am ET. Data received directly from the reference indexes through ICE Data Services. Commodities Oil prices fell again on Wednesday , but began to rise in after market hours. From Friday's close to Wednesday's close (U.S. time), U.S. West Texas Intermediate lost 11% and Brent dropped 9%.  Investors fear that oil demand will decrease in China after the country reported a drop in manufacturing activity.  Oil (NYSEARCA:OIL) 26.29 -4.19% Gold (NYSEARCA:GLD) 189.11 0.85% Silver (NYSEARCA:SLV) 23.43 0.34% Corn (NYSEARCA:CORN) 23.49 1.86% Lumber (NASDAQ:WOOD) 71.10 1.20% *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 US dollar weakened after the Federal Reserve raised rates by 25 basis points. The U.S. Dollar Index reached its lowest point in a week after falling 0.68% on Wednesday. The European Central Bank is expected to raise interest rates by 25 basis points today.  Consumer price inflation data in the U.S. will be released next week.  UK(GBP) £0.79 -0.90% Europe (EURO) €0.90 -0.68% Canada (Canadian Dollar) $1.36 -0.26% Japan (Yen) ¥134.47 -1.47% *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 After rising slightly on Wednesday, Bitcoin is again nearing the $30,000 threshold. The PEPE meme coin is now the most active on Uniswap. Zelda exited the Ethereum blockchain 12 days after starting its withdrawal due to the queue size to exit.  Curve Finance has deployed a native stablecoin. Bitcoin $29,095.30 1.56% Ethereum $1,903.86 0.00% Litecoin $88.49 -0.44% Bitcoin Cash $119.17 -0.09% *Exchange rates as of 7 am ET. Data from Morningstar Financial Research. To understand why we track these currencies and the differences between them,