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Markets largely ignore Fed minutes

Minutes released Wednesday from a meeting of the US Federal Reserve’s (Fed) policy-making body reinforced officials’ previous comments that more interest rate hikes are to be expected, albeit at a slower pace. The notes were largely in line with investor expectations for at least two more hikes this year. Consequently, stocks reacted minimally to the minutes with equity markets finishing the Wednesday’s session slightly lower.

Shane Strowmatt, LGT
Tempo di lettura
5 minuto
Federal Reserve Monetary Policy
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The Federal Open Market Committee (FOMC) showed signs of disagreement among the governing body’s members with some pushing for higher rates more quickly, according to the notes from last month’s meeting. Despite deciding to pause its interest rate hiking cycle after ten increases in a row, nearly all members agreed tighter monetary would still be needed. The pause allows the Fed to observe some key data yet this month - including Friday’s June employment report and the Consumer Price Index next week - before it announces its next interest rate decision on July 26.

In New York, the major stock indices closed slightly weaker Wednesday following the Independence Day holiday. The Dow Jones Industrial closed down 0.38% at 34,288.64 points. The S&P 500 dropped 0.20% to 4,446.82 points. The technology-heavy Nasdaq-100 fell 0.03% to 15,203.78 points. In individual stocks, United Parcel Service shares dropped 2% after talks with union representatives failed on Wednesday, raising the threat of a potential strike.

Stock markets in the Asia-Pacific region stocks were trading lower Thursday. The Hang Seng Index dropped 2.9% and the Shanghai Composite was down 0.5% in early trading. Japan’s Nikkei 225 lost 1.6%. South Korea’s Kopsi was trading 0.6% lower and Australia’s S&P/ASX 200 was down 1.2%.

Corporate news in focus: Südzucker Q1 figures.

Economic data in focus: German industrial orders (08:00 CET), eurozone retail sales (11:00), US ADP employment report (14:15), US trade balance (14:30), weekly US initial jobless claims (14:30), US Services Purchasing Managers’ Index (15:45), US JOLTS jobs report (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.