Morning Minutes

Stocks Try to Mount a Comeback Even as Interest Rates Keep Rising




US index futures are up off of their overnight lows and appear to be trying to claw back some of yesterday’s selloff declines of 2.1% to 2.5% for major US indices.

This rebound comes in the face of continued hawkish developments in monetary policy. Overnight, the Reserve Bank of New Zealand continued its interest rate hike program with an expected 0.50% increase to 4.75%, keeping it at the forefront of the global monetary tightening program. The RBNZ indicated that although inflation pressures have started to ease, it does not see its fight as being over and hinted that it plans to continue raising interest rates. Meanwhile, the US 10-year treasury note yield has climbed up into the 3.90%-3.95% area ahead of this afternoon’s release of minutes from the last FOMC meeting. Meanwhile, Canada January new house prices (2.7% vs street 3.9%) provided another indication that rising interest rates have impacted the housing market.  

US earnings reports released overnight beat expectations for the most part, headlined by retailer La-Z-Boy ($0.91 vs street $0.66, up 5.2% premarket), and Palo Alto Networks ($1.05 vs street $0.78, up 9.6% premarket). On the negative side, Intel cut is dividend by 66%. Later today, results are due from Nvidia, Etsy and Ebay.

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Colin Cieszynski, Chief Market Strategist

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

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