US stocks rise following anticipated rate hike by Federal Reserve
US stocks advanced higher on Wednesday as the market reacted to softer-than-expected earnings results from some key companies with Nasdaq 100 posting its biggest daily percentage gain since April 2020. Also, the Fed Reserve chair Jerome Powell announced a 75 basis points increase in interest rate while indicating that another large interest rate hike might be needed in September but would depend on upcoming economic data. Subsequently, Dow Jones increased 1.4% to finish at 32,197.59, S&P 500 increased 2.6% to finish at 4,023.61 while Nasdaq 100 increased 4.6% to finish at 12,032.42. The 10-year yield Treasury fell 5 basis points to 2.731%. Gold price decreased by $5.60 to $1,712.10 per ounce while WTI crude oil price increased $2.28 to $97.26 per barrel.
US stocks advanced higher on Wednesday as the market reacted to softer-than-expected earnings results from some key companies with Nasdaq 100 posting its biggest daily percentage gain since April 2020. Also, the Fed Reserve chair Jerome Powell announced a 75 basis points increase in interest rate while indicating that another large interest rate hike might be needed in September but would depend on upcoming economic data. Subsequently, Dow Jones increased 1.4% to finish at 32,197.59, S&P 500 increased 2.6% to finish at 4,023.61 while Nasdaq 100 increased 4.6% to finish at 12,032.42. The 10-year yield Treasury fell 5 basis points to 2.731%. Gold price decreased by $5.60 to $1,712.10 per ounce while WTI crude oil price increased $2.28 to $97.26 per barrel.
Bunds open weaker following trend from yesterday. The 10Y touched a high of 1.00% before dropping to 0.99%, 1bp down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open;10Y BTPs yields went as high as 3.31% before retreating to 3.30%, basis point firmer intraday. Stocks advanced as investors absorbed data of corporate earnings amid anticipated fed rate hike of 75 basis points. Consequently, the Stoxx 600, opened higher at 430.36 compared to previous session’s closing of 428.12.
SSA opens firmer following the Fed’s expected 75bps hike on Wednesday. NGERIA’s run of underperformance extended on Wednesday with a 0.875-pt slide as the space retraced pre-FOMC; it leads the recovery surging almost a point at the open. ANGOL and KENINT similarly retraced with a 0.625-pt drop while ZAMBIN’s half a point gain was the only positive performance in the space for a second day running.
Activity in the Nigerian local Secondary Market for Bonds was relatively slow amid a feeble system liquidity. We saw mixed performance across the curve with improved offers on the short end while the mid to the long end saw some demand trickle in. Intraday, average yields were lower by 1bp across board. Consequently, FGN 26s closed at an offer rate of 11.45%,10 basis points up from previous level of 11.35% while 50s closed at an offer rate of 13.22%, 18 basis points down from previous level of 13.40. Activity in the Secondary Market for Treasury bills was calm with few trades done as weakness in money market liquidity continued. Consequently, discount rates on 29th of August 2022 SPEB & 29th of June 2023 NTB were at 12.50% and 5.85% respectively. Meanwhile stop rates at the NTB auction conducted yesterday printed at 2.8% (previous: 2.75%) for 91 days, 4.10%(previous:4.00%) for 182 days and 7.00% (same as current) for 364 days. Finally, the exchange rate between the naira and the US dollar closed at N425.18/$1 at NAFEX compared to previous session’s level of N424.38/$1, a depreciation of circa 0.19%.