*US equities halt a 2-day slide following Powell's comments*
*8 February 2023*
Nasdaq 100 Index 12728.27, (2.12%)↑
S&P 500 Index 4164.04, (1.29%)↑
Dow Jones Indus Avg Index 34156.69, (0.78%)↑
US stocks rallied in a choppy session as investors digested *Powell's comments that a "disinflation" process had begun but further rate hikes are appropriate* due to a tight labor market. The *10-year Treasury yield* rose to around 3.66%. 8 of 11 sectors closed in the green, with *Energy* and *Communication Services* leading gains while *Consumer Staples* led shares lower. The *VIX (-3.65%)* decreased to 18.72.
*Fed Chair Jerome Powell* stated that we are in the *early stages of disinflation* but it will "take a significant period of time" as *services inflation remains persistent* amidst a hot labor market. Powell floated the idea that *interest rates may reach a higher peak* than markets anticipate, stating that the Fed "needs to do further rate increases" as the "labor market is extraordinarily strong". *Minneapolis Fed President Neel Kashkari* called for rates to peak at around 5.4% as *"the services sector of the economy is still very robust"*. We think this echoes the idea that the 5.1% terminal rate forecasted in the December Dot Plot is a soft ceiling, as the Fed appears willing to bring rates higher if necessary.
*Chegg (-17.12%)* tumbled after the education technology company issued weaker than expected guidance for 2023. *Hertz Global (+7.47%)* and *DuPont De Nemours (+7.50%)* both gained on higher than expected quarterly profit. *Zoom Video Communications (+9.85%)* jumped after it became the latest tech firm to announce layoffs, as it looks to slash about 15% of its workforce. *Royal Caribbean Cruises (+7.12%)* rose after reporting a smaller than expected quarterly loss and strong booking numbers. *Bed Bath & Beyond (-48.63%)* plummeted after it announced plans to sell up to $1B in equity to raise cash. After hours, *Chipotle* (-5.10%) slumped after missing top and bottom line estimates.
*8 February 2023*
Nasdaq 100 Index 12728.27, (2.12%)↑
S&P 500 Index 4164.04, (1.29%)↑
Dow Jones Indus Avg Index 34156.69, (0.78%)↑
US stocks rallied in a choppy session as investors digested *Powell's comments that a "disinflation" process had begun but further rate hikes are appropriate* due to a tight labor market. The *10-year Treasury yield* rose to around 3.66%. 8 of 11 sectors closed in the green, with *Energy* and *Communication Services* leading gains while *Consumer Staples* led shares lower. The *VIX (-3.65%)* decreased to 18.72.
*Fed Chair Jerome Powell* stated that we are in the *early stages of disinflation* but it will "take a significant period of time" as *services inflation remains persistent* amidst a hot labor market. Powell floated the idea that *interest rates may reach a higher peak* than markets anticipate, stating that the Fed "needs to do further rate increases" as the "labor market is extraordinarily strong". *Minneapolis Fed President Neel Kashkari* called for rates to peak at around 5.4% as *"the services sector of the economy is still very robust"*. We think this echoes the idea that the 5.1% terminal rate forecasted in the December Dot Plot is a soft ceiling, as the Fed appears willing to bring rates higher if necessary.
*Chegg (-17.12%)* tumbled after the education technology company issued weaker than expected guidance for 2023. *Hertz Global (+7.47%)* and *DuPont De Nemours (+7.50%)* both gained on higher than expected quarterly profit. *Zoom Video Communications (+9.85%)* jumped after it became the latest tech firm to announce layoffs, as it looks to slash about 15% of its workforce. *Royal Caribbean Cruises (+7.12%)* rose after reporting a smaller than expected quarterly loss and strong booking numbers. *Bed Bath & Beyond (-48.63%)* plummeted after it announced plans to sell up to $1B in equity to raise cash. After hours, *Chipotle* (-5.10%) slumped after missing top and bottom line estimates.
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