Key Market Insights September 22

8 min read

US Markets

Stock futures were flat overnight after a negative trading day on Tuesday as investors expect an interest rate hike to come this afternoon.

  • The Federal Reserve is expected to announce a third consecutive 75-basis point interest rate hike later today, following hawkish comments in August and an unexpected rise in the Consumer Price Index last month.
  • The current 2 Year U.S. Treasury yield is set at 3.99982%, which is the highest mark since 2007.
  • The current 10 Year U.S. Treasury yield is set at 3.56030%, which is its highest mark since 2011.
Market Price Move
Dow Jones 30,706.23 -1.01%
S&P 500 3,855.93 -1.13%
Nasdaq 11,425.05 -0.95%
Russell 2000 1,787.50 -1.40%

 

Canadian Markets

New data from Statistics Canada shows that inflation in Canada continues to fall, unlike in the United States.

  • August saw a 0.3% decrease in consumer prices compared to July. In the United States, the Consumer Price Index rose by 0.1% last month.
  • Core inflation in August was 5.2%, lower than the 5.4% rate reported in July.
  • The Consumer Price Index for August was up 7% from last year, compared with 7.6% in July and 8.1% in June.
Market Price Move
TSX 19,368.69 -0.39%

 

European Markets

European stocks fell on Tuesday despite a late rally on Monday that created positive momentum heading into the trading day.

  • The Stoxx 600 finished down 1.1% after gaining nearly 1% in the first few hours of trading.
  • Construction stocks were the worst performing, losing 2.4% on the day.
  • Fortum was one of the biggest winners, gaining 9.5%, as the Finish energy company appears close to reaching a deal to sell its controlling stake in Uniper to the German government.
Market Price Move
Euro STOXX 50 3,467.09 -0.93%
UK (FTSE 100) 7,192.66 -0.61%
Germany (DAX) 12,670.83 -1.03%
France (CAC 40) 5,979.47 -1.35%

 

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Asian Markets

Stocks in Asia were down early on Wednesday morning as investors anticipated that a stronger U.S. Dollar would negatively impact Asian markets.

  • Stocks in Japan and Korea fell nearly 1% immediately upon opening as they reacted to U.S. trading on Tuesday.
  • Stocks in China were also down in early trading, with tech stocks leading losses.
  • Asian stocks continue to struggle due to a difficult macroeconomic environment and the ongoing COVID-19 outbreaks.
Market Price Move
S&P Asia 50 4,219.88 0.65%
Japan (Nikkei 225) 27,413.37 0.99%
South Korea (KOSPI) 2,348.44 -0.82%
China (Hang Seng) 18,638.85 -0.76%
India (SENSEX) 59,719.74 0.98%

 

Commodities

Oil prices were down on Tuesday as commodities fell in anticipation of a stronger U.S. Dollar.

  • Brent crude was down 1.9%, while U.S. West Texas Intermediate lost 1.5%.
  • New data showed that travel by car decreased by 3.3% in the U.S. this summer compared to last year.
  • Markets continued their downward trajectory despite OPEC+ decreasing the supply of oil internationally by 3.5% due to production quotas being missed.
Market Price Move
Oil (NYSEARCA:OIL) 29.89 -1.09%
Gold (NYSEARCA:GLD) 155.07 -0.57%
Silver (NYSEARCA:SLV) 17.73 -1.45%
Corn (NYSEARCA:CORN) 27.60 1.92%
Lumber (NASDAQ:WOOD) 69.59 -4.11%

 

Currency Exchange Rates

After rising on Tuesday, the U.S. Dollar is very close to the 20-year high it hit earlier this month.

  • Investors have priced in an 81% chance of a 75-basis point interest rate increase and a 19% chance of a 1-percentage point hike.
  • The U.S. Dollar Index is on track for its fifth consecutive positive week.
  • After gaining 0.35% on Tuesday, the index is now at 110.12.
Market Price Move
UK(GBP) £0.88 0.54%
Europe (EURO) €1.00 0.57%
Canada (Canadian Dollar) $1.34 0.87%
Japan (Yen) ¥143.76 0.69%

 

Cryptocurrency

Ethereum continued its decline on Tuesday and has now lost 15% since the Merge.

  • Bitcoin, for comparison, is down just 4.4% in the same time period.
  • Analysts say the decline is due to the Merge and anticipation of its success already being priced into the currency, meaning that once the Merge happened there was no incentive for traders to hold Ethereum.
  • Bitcoin continued to trade below $20,000, and investors fear it may fall to $14,000 if an increase in interest rates today causes it to drop below $18,000.
Market Price Move
Bitcoin $18,904.50 -2.64%
Ethereum $1,329.44 -3.56%
Litecoin $52.35 -1.02%
Bitcoin Cash $112.94 0.99%

 

Good trading,
Chris Svorcik

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