Home Headlines Shares choppy, U.S. yields fall as investors digest Fed minutes
Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Shares choppy, U.S. yields fall as investors digest Fed minutes

by jcp
1 views

By Chibuike Oguh

NEW YORK (Reuters) – Global equity markets were choppy and U.S. Treasury yields fell on Thursday, as uncertainty over the pace of interest rate hikes prevailed among investors after the Federal Reserve’s meeting minutes showed officials were determined to curb rising prices.

Markets have remained bearish amid concerns about a looming recession, even though Fed officials indicated in the minutes of their July meeting released on Wednesday that they would adopt a less aggressive stance if inflation starts to recede.

“The markets are still trying to figure out the Fed minutes,” causing volatility, said Charles Self, chief investment officer at Tandem Wealth Advisors in Appleton, Wisconsin.

“The minutes were uniformly hawkish in our view,” Self added. “It’s clear that among all the voting members that curing inflation is the No. 1 choice and they’re going to do whatever is necessary as far as raising rates to get there. We think they’re using the labor market as cover.”

MSCI’s gauge of stocks in 50 countries across the globe shed 0.23%. The pan-European STOXX 600 index, however, edged up 0.39%.

U.S. Treasury yields edged lower as investors continued to digest the Fed meeting minutes. Benchmark 10-year notes were down to 2.8713%, from 2.895% on Wednesday. Two-year notes retreated to 3.2246%, from 3.295%.

The yield curve between two- and 10-year Treasury notes, widely viewed as an indicator of impending recession, remained inverted at minus 38 basis points on Thursday.

“Since the Fed’s July 27 meeting, the two-year yields have been up 43 basis points, meaning that the bond market thinks they’re going to raise rates higher for a longer period of time, whereas the stock market has been up 5%, meaning the market thinks they’ll raise rates relatively quickly and maybe even decrease rates next year,” Self added.

“Well, I think the bond market is usually right.”

MAJOR INDEXES

On Wall Street, all major indexes were trading lower, driven by a selloff in stocks in the healthcare, financials, consumer discretionary and consumer staples sectors.

The Dow Jones Industrial Average fell 0.33% to 33,867.17, the S&P 500 lost 0.11% to 4,269.42, and the Nasdaq Composite dropped 0.05% to 12,931.39.

Oil prices gained about 2% as robust U.S. fuel consumption data and an expected drop in Russian supply later in the year offset concerns that slowing economic growth could undercut demand.

Brent futures rose 2.26% to $95.77 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 2.04%, to $89.91.

The U.S. dollar index hit a three-week high as investors reevaluated Wednesday’s Fed minutes as more hawkish than originally interpreted and after data showed solid U.S. economic momentum.

The dollar index rose 0.647%, with the euro down 0.78% to $1.0101.

Gold reversed earlier gains and was lower on a firmer dollar, as investors looked for more economic cues that could influence rate hikes. Spot gold dropped 0.2% to $1,757.68 an ounce, while U.S. gold futures gained 0.15% to $1,762.90 an ounce.

 

(Reporting by Chibuike Oguh in New York; Editing by Susan Fenton and David Holmes)

You may also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More