United States
Equities rebounded late Wednesday after Federal Reserve Chair Jerome Powell appeared to calm investor fears that the Fed was likely to raise rates by 75 basis points at its next policy meeting. The Dow Jones industrial average rose 2.8 percent, the S&P 500 gained 3.0 percent and the NASDAQ jumped 3.2 percent.
Speaking after the Fed delivered a 50 basis point rate increase and announced it would start letting its balance sheet holdings run off gradually, as expected, Powell told reporters 50 basis point rate increases were on the table, with no active consideration of larger rate moves. He repeated that the Fed would return rates to neutral "expeditiously" and that policy-makers are "highly attentive" to inflation risks associated with supply chain disruptions and China's shutdowns. Powell said he saw a good chance the Fed can engineer a "softish landing."
Among sectors, best were big tech including chipmakers, financials, media, energy, transports, homebuilders, and chemicals. Energy stocks got a boost from news the European Union would phase out Russian oil imports by year end. Lagging were consumer discretionary, especially restaurants, casinos, and cruise lines, plus airlines and apparel.
Among companies in focus, Lyft dropped 30 percent on bleak guidance and rising costs, the latest growth stock disappointment. Uber fell 4.7 percent on the same cost concerns. On the positive side, AMD, the chipmaker, rose 9.1 percent on earnings and revenues beats.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$5.11 to US$110.52 while spot gold rose US$17.36 to US$1,884.73. The US dollar was weaker vs. most major currencies. The US Treasury 30-year bond yield declined 3 basis points to 3.00 percent and the 10-year note yield was down 8 basis points at 2.91 percent.
Europe
Equities slipped on mixed company earnings news and caution ahead of the Fed's policy news. The Europe-wide STOXX lost 1.0 percent, the German DAX declined 0.5 percent, the French CAC fell 1.2 percent and the FTSE 100 was down 0.9 percent.
Markets were awaiting comments from Fed Chair Jerome Powell addressing concerns that the Fed may be considering 75 basis point rate increases. Meanwhile, European Central Bank governing council member Isabel Schnabel said the ECB may need to raise rates as soon as July.
Retail stocks lagged with Boohoo Group, the online clothing store, dropping 12 percent on disappointing core earnings news reflecting rising costs. Pandora, the jeweler, lost 2.1 percent after weak guidance. Hugo Boss, the luxury clothing firm, fell 2.5 percent on fallout from China shutdowns.
Other lagging sectors included real estate, basic resources, and food & beverage. Media, oil & gas, and chemicals held up best. Among media stocks, United Music Group rose 0.9 percent on an earnings beat and better guidance. In the energy space, Equinor, the Norwegian oil & gas company, gained 3.2 percent on a profits beat reflecting surging oil prices.
Among other companies in focus, Skanska, the construction giant, fell 9.8 percent amid supply disruptions linked to the Ukraine conflict. Just Eat Takeaway lost 9.4 percent after leading shareholders voiced lack of confidence in management.
Asia Pacific
Asian equities were flat to weaker with Hong Kong and India lagging, and activity limited by holidays in Japan and mainland China.
Hong Kong equities slipped with the Hang Seng index down 1.1 percent and tech stocks hit by a selloff in Didi Global, down 4.0 percent, after saying it was under investigation by the Securities and Exchange Commission in connection with its 2021 IPO.
Unexpected news that the Reserve Bank of India raised its repo rate by 40 basis points and RBI warnings on high inflation whacked Indian equities with the BSE Sensex dropping 2.3 percent.
Taiwan's Taiex firmed 0.4 percent with a boost from chip-makers. South Korean equities edged down with the KOSPI off 0.1 percent.
Australian equities weakened in quiet trading with Australia's rising interest rates in focus. The All Ordinaries index declined 0.3 percent. Consumer discretionary and tech shares lagged while energy and financials held up best.
Looking ahead*
In Asia/Pacific, Hong Kong PMI, Singapore PMI, Australian goods & services trade, India PMI composite, and Chinese PMI composite figures are due. In Europe, German manufacturers' orders, Swiss CPI, French industrial production, UK PMI composite, and the Bank of England policy announcement and minutes are on the schedule. In North America, US jobless claims and US productivity & costs reports are on tap.
