Morning Minutes

Stocks Rebound as Investors Digest Interest Rate Increases




Yesterday afternoon, the Fed raised the Fed Funds rate by 0.25% to 5.00%. The US central bank took the middle path in its statement and projections. The majority of FOMC members indicated they are thinking one more interest rate hike this year, then a path downward starting in 2024 that was unchanged from December projections. There were no radical changes to GDP, inflation or unemployment forecasts.

At first, investors took a lack of dovishness as a negative, sending major US indices down 1.6% yesterday. This morning, US index futures are up 0.2% to 0.9% suggesting that some investors have decided overnight that the Fed not hitting the panic button and dialing back previous hawkishness may actually be a positive sign.

European markets are down this morning with the Dax falling 0.5% and the FTSE sinking 0.8%. The Bank of England raised its benchmark rate by 0.25% to 4.25%, while the Swiss National Bank raised its benchmark rate by 0.50% to 1.50%. This appears to be two cases of central banks which are not as far along in their tightening programs still playing catch-up. The SNB hinted that it plans to continue raising rates despite the recent problems with Credit Suisse.   

US weekly initial jobless claims and new home sales are due later this morning. Tomorrow brings a flurry of economic announcements, including retail sales reports for the UK and Canada, plus Flash PMI reports from around the world, the first quick peek at economic conditions in March and whether recent stresses in the banking system have impacted the broader economy.  

SIA Wealth In The Media:

Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg where he spoke about renewed interest in SIA Wealth Management’s tactical investing strategy, comparative analysis process, relative strength, and the recent resurgence in Gold plus the Japanese Yen.

When the financial system gets rocky, gold becomes a safe haven for capital: Chief market strategist

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Colin Cieszynski, Chief Market Strategist

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

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