(Bloomberg) — Shares fell after hawkish remarks from Federal Reserve officials, with swaps currently at a 5% high in the first half of next year. The pound rose after Liz Truss resigned as UK prime minister.
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The S&P 500 Index spiked after Philadelphia Fed Director Patrick Harker said policymakers are likely to raise interest rates “above” 4% this year and keep them in check – while remains open to the possibility of doing more if needed. Fed Governor Lisa Cook also spoke, noting that interest rates will need to continue to rise to keep inflation in check. The standard rate is between 3% and 3.25%.
“Stocks are not out of the woods yet,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “Concerns about further tightening of central bank policy amid a high inflation and low growth environment means investors will avoid aggressive stock buying. Even at these relatively inexpensive rates. “
Traders also sift through a wide range of corporate earnings, with Tesla Inc.’s disappointing sales. and the top forecast by International Business Machines Corp. Some market observers commented that the bar has been lowered a bit ahead of earnings season, increasing the odds of a surprise increase. There is also no shortage of warning signals about the economy.
For example, Alcoa Corp. joined the metal’s rally on Thursday. But its quarterly loss signaled a worse environment for a company that just last month warned investors that they were being squeezed by higher costs and falling aluminum prices. And it’s a reliable barometer of the health of sectors including construction, automotive, aerospace and consumer packaging.
Another worrisome signal came from Union Pacific Corp., the largest US freight rail company, which cut its output growth forecast to reflect a “challenging year”.
“As traders look at the company’s results,” said Mike Loewengart at Morgan Stanley Global Investments, “with more in-depth guidance, expect volatility to continue to increase.” .
Sterling has climbed to around $1.13 and the 10-year gilt return is close to where it was before the mini-budget was announced last month. The FTSE 250 index rose 1.2%. Many investors expect the next UK prime minister to restore calm and make policy decisions that bring stability back to the markets. Some traders say the market will be volatile until an alternative name is available.
Some key moves in the market:
Inventory
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The S&P 500 fell 0.7% at 1:52 p.m. New York time
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Nasdaq 100 drops 0.5%
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The Dow Jones Industrial Average fell 0.3%
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MSCI World Index down 0.5%
Currency
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The Bloomberg Dollar Spot Index is down 0.1%.
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The euro rose 0.1% to $0.9784
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British Pound rose 0.2% to $1.1239
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The Japanese yen was little changed at 150.01 a dollar
Electronic money
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Bitcoin drops 0.6% to $19,082.6
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Ether drops 0.8% to $1,284.04
Bonds
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Yields on 10-year Treasuries rose 8 basis points to 4.21%
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German 10-year yield rises three basis points to 2.40%
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UK 10-year yield rose three basis points to 3.91%
Goods
–With support from Vildana Hajric and Peyton Forte.
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