US close, nos etc..4 May 2023 07:43
True to past form the Fed raised rates (its 10th consecutive) by 25bp to 5%-5•25% its highest in 16 years. Chairman Powell hinted at a pause but didn't rule out further raises at the next meet in June if inflation continues at these elevated levels. Current rates are still below historic averages and are expected to ease toward year end.
The US Commerce Dept said US growth was limited to 1•1% in the first 3 months of the year. However the latest report on the economy showed it has grown for three quarters in a row albeit down from 2•6% in the prior quarter.
News that PacWest Bancorp was considering a sale or break-up sent the stock tumbling 50% and Comerica & W.Alliance sliding to fresh lows. However, turmoil in the sector didn't phase Powell who insists the Banking system is sound and resilient and thinks a soft landing is possible.
The KBW Nsdq index which monitors 24 of the largest national and regional lenders stock prices takes a different view as the index has fallen 27% ytd.
Comex Gold futures edged higher as fears of more Banks becoming insolvent supported a move higher for Bullion which has risen 12% so far this year.
US crude fell to $68 after a 5% fall on Tuesday. Despite positive inventory nos usually good for prices, oil fell below its 5 year average and trades 16% down ytd. Goldman has Oil as their preferred sector forecasting $100 a barrel over the next 12 months.
At close
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DJ -270 (33,414)
SP -29 (4091)
NS -83 (13,030)
R2 u/c (1126)
WTI $69
10ytb 3•343%
Latest:- Vix 18. Brent $73.
Gold $2045. Copper $3•892.
Palm $980. Silver $26•090.
$1•258. €1•136. Yen 136•6.
FF-17. DF+50.
Morning all.
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