(News Bulletin 247) – US equity markets regained some color on Thursday the day after the Fed’s announcements, which fueled expectations of an upcoming halt in the rate hike cycle.

Approaching mid-session, the Dow Jones gained more than 1.1% to 32,391.4 points, while the Nasdaq Composite gained 2% to 11,903 points, largely erasing their fallback from the day before.

On Wednesday, US stocks had lost around 1.6% following monetary policy decisions by the Fed, which raised rates by 25 basis points while signaling upcoming rate hikes.

But this fall seemed more linked to statements by Janet Yellen, the Treasury Secretary, dismissing the scenario of a rescue of regional banks.

Following remarks made the day before by Jerome Powell, the chairman of the Federal Reserve, investors are saying that the institution is probably starting to approach the end of its rate hike cycle.

The publication, in parallel, of rather solid economic indicators revives their hopes of a ‘soft landing’ for growth, considered to be the ideal scenario from the point of view of the financial markets.

It appears indeed that employment remains very robust, as shown by the weekly registrations for unemployment benefits which fell by 1,000 during the last week, to 191,000 against 192,000 the previous week.

The surprise of the day comes from sales of new homes (+1.1%) which continued to rise in February despite the rise in real estate prices and the rise in borrowing rates.

‘The lack of offers on the side of the old market is pushing buyers to focus on the new construction market’, explains an analyst.

On the rate side, a clear relaxation took place on the yield of ten-year Treasuries, which fell back to 1.46%. The yield spread should benefit the dollar but this is not the case since the greenback is down 0.3% against the euro, which is trading around 1.0890.

With the rise on Wall Street, oil prices reversed course and US light crude (West Texas Intermediate, WTI) recovered 1.7% to 71.2 dollars.

In terms of stocks, Ford outperformed on Thursday (+2%) following the announcement of its reorganization around three major divisions, including one devoted to electric vehicles, as part of its ‘Ford+’ strategic plan.

Boeing is also well oriented (+1.8%) while analysts at Wolfe Research consider that the title represents an opportunity to buy below 200 dollars, a threshold pressed yesterday by the value.

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