Canada’s central bank hikes interest rates
Warning shot makes Wall Street sit up and take notice
06/07/2023 10:44 p.m
In the middle of the week, investors cash in on technology stocks. Interest rate prospects came back into focus before the Fed meeting. Canada’s central bank gives Wall Street a lesson with a surprise rate hike.
Wall Street presented itself inconsistently in the middle of the week. While the Dow Jones index posted modest gains, the Nasdaq indices fell sharply. Looking ahead to next week’s Federal Reserve meeting, skepticism increased somewhat. The market is currently expecting an interest rate pause by the US Federal Reserve with a probability of “only” 69 percent, in the meantime the value had even fallen to 64 percent; in the morning the number was still 77 percent.
The Canadian central bank has presented and unexpectedly raised interest rates by 25 basis points. This served as a reminder to investors that the Fed might not be a safe bet either – and that further rate hikes may be on the cards after a potential interest rate pause. As a result, bonds, gold and technology stocks came under pressure.
The Dow Jones Index gained 0.3 percent to 33,665 points. The S&P 500 lost 0.4 percent. For the Nasdaq Composite was down 1.3 percent. The 1,933 (Tuesday: 2,368) price winners faced 1,030 (638) losers, while 84 (61) titles closed unchanged. New economic data from China were rated negatively. Exports in May fell surprisingly sharply after growth in the two previous months. Imports also fell again year-on-year.
Dollar softens slightly
There was little movement on the foreign exchange market. The dollar index increased minimally, the euro continued to trade around the $1.07 mark. “The dollar’s resilience suggests a reluctance to build dollar shorts ahead of US CPI on June 13, which still has the potential to tip the balance towards a rate hike the following day,” ING said .
After losses in the course, oil prices showed premiums. The weak economic data from China had caused a burden, which increased concerns about Chinese oil demand. On the other hand, the Saudi decision to cut production was still supported, it said. Official US crude oil inventory data has shown a slight drawdown in inventories, while forecasts had called for a buildup. However, gasoline inventories have increased more significantly, which could provide an indicator for the upcoming travel season.
Prices on the US bond market fell significantly. The Canadian interest rate hike provided an impetus here, it said. The 10-year yield climbed 12 basis points to 3.79 percent. The price of gold came under pressure with the change in US interest rate speculation.
Coinbase stock with small recovery
The individual values recovered Coinbase stock something of the strong price losses of the past few days. The US Securities and Exchange Commission sued the crypto company on Tuesday. The SEC says the largest US crypto platform violates rules requiring exchange registration and federal oversight. At the beginning of the week, the SEC sued the cryptocurrency exchange Binance and its founder Changpeng Zhao. Coinbase stock recovered 3.2 percent after falling a good 20 percent over the past two days.
For the shares of Campbell Soup was down 8.9 percent. While third quarter results were in line with guidance, the full year outlook was below market expectations.
The papers from Dave & Buster’s Entertainment up 18 percent after the themed restaurant chain beat market expectations for first-quarter earnings. yext up 38.4 percent after the digital platform beat market expectations for the first period. In addition, the company raised the sales and profit outlook for the year as a whole.