Key Market Insights September 23

8 min read

US Markets

Stock markets were volatile on Wednesday but finished down after the Federal Reserve announced its third 75-basis point interest rate hike in a row.

  • The S&P 500 is now down 10% in the last month and 21% from its all-time high.
  • Every sector of the S&P 500 finished in the red, with communications, consumer, and materials stocks dragging down markets.
  • The current 10 Year U.S. Treasury yield is set at 3.53090%
Market Price Move
Dow Jones 30,183.78 -1.70%
S&P 500 3,789.93 -1.71%
Nasdaq 11,220.19 -1.79%
Russell 2000 1,762.16 -1.42%

 

Canadian Markets

Canadian stocks rose on Wednesday despite the decline in U.S. markets.

  • Bank of Montreal’s chief of fixed income and money markets, Earl Davis, said there is a “99.9%” chance that the Federal Reserve’s interest rate hikes will cause a recession in the U.S.
  • He argued that while it may be “a policy mistake,” central bankers may want to cause a recession because that may be the only way to control inflation.
  • The Bank of Canada has been increasing interest rates more aggressively than the Federal Reserve and, as a result, Canada, unlike the U.S., has seen a decrease in inflation.
Market Price Move
TSX 19,430.67 0.32%

 

European Markets

Stocks in Europe were up on Wednesday despite the negative moves in the U.S.

  • The Stoxx 600 finished up nearly 1% after starting the day down almost 0.5%.
  • Travel and Leisure stocks dragged down markets, losing 1.9%.
  • Utility stocks outperformed all other sectors after gaining 1.8%.
Market Price Move
Euro STOXX 50 3,479.04 0.34%
UK (FTSE 100) 7,233.70 0.57%
Germany (DAX) 12,712.75 0.33%
France (CAC 40) 6,006.17 0.45%

 

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Asian Markets

Stocks in Asia were down on Wednesday due to the anticipation of the Federal Reserve interest rate hike that was announced after markets in Asia had closed.

  • The Chinese economy continues to struggle as the county reassesses its Zero Covid policy, which has drawn criticism from citizens frustrated with the ongoing lockdowns.
  • China is also suffering from a decrease in business from western countries as Beijing takes “ideological” decisions that undermine the interests of foreign companies.
  • All major indexes in China saw losses, led by a decline in technology stocks, with the Hang Seng Tech index down 2.7%.
Market Price Move
S&P Asia 50 4,165.64 -1.76%
Japan (Nikkei 225) 27,313.13 -1.36%
South Korea (KOSPI) 2,347.21 -0.87%
China (Hang Seng) 18,444.62 -1.79%
India (SENSEX) 59,456.78 -0.44%

 

Commodities

Oil prices reached a nearly two-week low during U.S. trading hours on Wednesday due to the rise in interest rates.

  • Prices rose significantly before trading began as Putin announced a major military mobilization in Ukraine.
  • Brent crude lost 0.9% on Wednesday, while U.S. West Texas Intermediate was down 1.2%.
  • During Asian trading hours, before U.S. markets opened, Brent gained nearly 3%.
Market Price Move
Oil (NYSEARCA:OIL) 30.50 2.38%
Gold (NYSEARCA:GLD) 155.53 0.30%
Silver (NYSEARCA:SLV) 17.93 1.10%
Corn (NYSEARCA:CORN) 27.36 -1.45%
Lumber (NASDAQ:WOOD) 69.58 -0.01%

 

Currency Exchange Rates

The U.S. Dollar continued its rise, gaining against all major currencies after the Federal Reserve announced its interest rate hike.

  • The Fed now projects that interest rates will hit 4.4% by the end of 2022 and continue to rise in 2023.
  • The Fed expects that it will begin to cut rates in 2024.
  • The U.S. Dollar Index is currently at a 20-year high after rising nearly 1% yesterday.
Market Price Move
UK(GBP) £0.89 1.49%
Europe (EURO) €1.02 1.89%
Canada (Canadian Dollar) $1.35 1.62%
Japan (Yen) ¥144.08 0.60%

 

Cryptocurrency

Bitcoin prices continued to fall on Wednesday due to the interest rate hike.

  • Bitcoin is now below $19,000, at risk of crossing the $18,000 support level.
  • Ethereum’s decline continued to outpace Bitcoin as it fell 3% during U.S. trading hours compared to a 1% decrease for Bitcoin.
  • Kraken CEO Jesse Powell has announced that he will be stepping down.
Market Price Move
Bitcoin $18,354.30 -6.21%
Ethereum $1,242.95 -6.22%
Litecoin $50.77 -3.00%
Bitcoin Cash $110.11 -1.73%

 

Good trading,
Chris Svorcik

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