Morning Minutes

Fed Decision Day Arrives as Rising Rates Hammer Housing Market




The big FOMC interest rate and Quantitative tightening decisions that investors have been worrying about for the last several weeks arrive today at 2:00 pm EDT. The Fed is widely expected to raise its benchmark interest rate by 0.5% and start running down its balance sheet. Ahead of the decision, US index futures are up about 0.4%, but European markets are down with the FTSE falling 0.4%. Tomorrow morning, the Bank of England is expected to announce another 0.25% rate hike.

ADP payrolls are out this morning and came in below expectations (247K vs street 395K). The ISM Service PMI report is due at 10:00 am EDT, with the street expecting 54.7 for the headline number and 84.1 for the prices paid component.

The impact of rising interest rates and Quantitative Tightening in Canada on the housing market became clearer this morning. The Toronto Real Estate Board announced that home sales in April fell 27% from March and plunged 41% from a year ago, while the average selling price slipped 3.5% from a month ago to $1.254 million. Home sales in Vancouver fell by 23.1% over the month of April, while the average selling price increased by 1% to $1.374 million.

Earnings season continues today with a number of positive reports out including Moderna ($8.58 vs street $5.21), AMD ($1.13 vs street $0.91), and AirBnB (-$0.03 vs street -$0.29).

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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