September 30, 2022

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Wall Street opened lower. Five things that could move US markets today, Thursday, September 22

Weak opening of indicators Wall Streetwith investors worried by the words of the Federal Reserve Governor, Jerome Powell, which does not appear to be reversing the aggressive interest rate approach. The Dow Jones lost 0.4%, the S&P 500 lost 0.6% and the Nasdaq 0.9%. Here are five things that could move the markets today, Thursday, September 22nd.

1) Investors focus on the impact of an interest rate hike

Wednesday, September 21 Federal Reserve Announced The third tightening in a row on interest rates From 75 basis points. A decision the market has already assumed for some time. “Economic forecasts and the dotted chart surprised market expectations, showing another increase in rates – as low as 4.25% at the end of 2022 while the median value of rates is at 4.4% – and they are not cut until the end of 2023.” Federico Viterellamarket strategist at IG Italia, noting that Powell “showed a very aggressive streak, which indicates that the US central bank does not intend to put an end to the measures to combat the mounting inflationary pressures, which in August reached +8.3% y/y”.

2) The inversion of the bond curve widens: the risk of a recession increases

The inversion of the US government bond curve is widening, a sign that traditionally has signaled the arrival of a recession in the next 12 months. The treasury The yield on the two-year bond was 4.1% in the morning versus 3.65% for the 10 year. The gap between the bonds has reached more than 50 points: this is the largest reversal since June 2000.

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3) Unemployment increases in line with expectations

Data on the labor market are in line with expectations. Weekly Grant Applications The unemployment In the US, it increased by 5,000 units to 213,000, just below the 215,000 units unanimously envisaged by economists he contacted. The Wall Street Journal. This was announced by the Washington Department of Labor, adding that the number of benefits continuing through September 10 fell by 22,000 units to 1.379 million.

4) New 20-year highs for the dollar

The race never stops dollar, which in the morning reached its highest level in 20 years against the euro. The exchange rate between the single European currency and the dollar fell below 0.99, heading towards 0.985. The Federal Reserve has once again taken the US currency off the ground, hinting that more upsides are likely.

5) The danger of atomic escalation in Ukraine

Meanwhile, tensions remain strong on the military front. After the partial mobilization imposed by Vladimir Putin yesterday on September 21, today September 22 came the words of the former tenant of the Kremlin, Dmitry MedvedevWhich was radical: to defend the Donbass, Moscow is ready for it Also the use of strategic nuclear weaponsThose who have great destruction target enemy cities. (All rights reserved)