December 9, 2022

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Stocks Boosted by Rate-Hike Outlook; Dollar Slips: Markets Wrap

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(Bloomberg) — European stocks gained and the dollar fell after Federal Reserve meeting minutes showed support for more moderate interest-rate increases.

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The Stoxx Europe 600 Index extended its recent rally as the real estate sector outperformed, boosted by the prospects of slower rate hikes and analyst upgrades. Dr. Martens Plc shares plunged the most on record after the bootmaker’s sales and earnings missed expectations.

Trading volumes are expected to be lower due to the Thanksgiving holiday, which will mean no cash US equity market trading. Wall Street futures were up after the S&P 500 closed at a two-month high Wednesday. Asia’s equities benchmark climbed.

Minutes from the Fed gathering earlier this month indicated several officials backed the need to moderate the pace of rate hikes, even as some underscored the need for a higher terminal rate. This adds weight to expectations the central bank will raise rates by 50 basis points next month, ending a run of jumbo 75 basis point increases.

“It was the start of a more different and dovish narrative from the Fed,” said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James. “Is it a pivot? No, but are we seeing a slowdown in rate hikes and that path downwards towards rate cuts coming through? Yes. I think we will look back and say this was the peak of it.”

Data Wednesday also showed US business activity contracted and unemployment applications rose as the economy cools.

A gauge of dollar strength fell further Thursday, taking declines into a third day. There is no trading in Treasuries due to the US holiday.

Oil slipped as the European Union considered a higher-than-expected price cap on Russian crude and signs of a global slowdown increased.

Meanwhile, Bank of America Corp. said its private clients are flocking to bonds and out of stocks amid fears of a looming recession. Bond funds attracted inflows for a 39th straight week, strategists led by…

2022-11-24 05:35:59

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