Archives of “March 31, 2022” day

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JP Morgan shift from expecting 25bp hikes in May and June to 50bps in each

  
  Analysis

J.P. Morgan’:

  • We are now replacing our expectations for 25bp hikes in May and June with 50bp moves
  • reverting to 25bp hikes in July and thereafter

JPM project the ‘terminal’ funds rate just below3% in 2023.

JPM reasoning is “Powell’s latest pivot“:

  • The median dot from the March 16th dot plot showed the equivalent of seven 25bp hikes this year.
  • Speaking on March 21st Chair Powell said “each [dot plot] reflects a point in time and can become outdated quickly at times like these.” To prove his point, he followed this up with “if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.”
  • This sentiment was soon echoed by a chorus of Fed officials, including some traditional doves.
  • It’s hard to see what happened between March 16th and March 21st to motivate this change, certainly not economic data, and it’s unlikely there were enough surprises on the geopolitical front. Perhaps the market’s nonchalant response to the somewhat hawkish outcome of the FOMC meeting gave the Committee the opening to signal a faster tightening pace.
  • fed dates 2022

IEA and OPEC+ spat … Opec removes IEA as an information source

  
  Analysis

On a separate matter, the Paris-based energy watchdog the International Energy Agency (IEA) had been critical of Opec+, saying it is not doing enough to help tackle high energy prices.

  • IEA executive director Fatih Birol described the group’s decision to stick with a 400,000 b/d increase in its April crude quota as “disappointing”.

Opec now hits back:

  • has removed the IEA from the panel of “official” secondary sources that monitor the group’s monthly crude production
  • The agency has been replaced by consultancies Wood Mackenzie and Rystad Energy, which join Argus, the US’ Energy Information Administration, S&P Global Platts, IHS Markit and Energy Intelligence.

Info via this link

Stocks snap winning streaks today. S&P snaps 4-day streak. Nasdaq 2-day streak snapped

  
Analysis, US Market

The major indices all declined today with the NASDAQ and Russell 2000 leading the way to the downside. In moving lower, the major indices all snapped winning streaks:

  • S&P and Dow industrial average snapped their 4-day up streaks
  • NASDAQ index snapped it two day up streak
  • Apple, the bellweather for the big cap stocks, snapped it’s 11 day up streak.

The final numbers are showing:

  • Dow industrial average fell -65.40 points or -0.19% at 35228.82
  • S&P index fell -29.15 points or -0.63% at 4602.46
  •  NASDAQ  index fell -177.35 points or -1.21% at 14442.28
  • Russell 2000 fell -42.02 points or -1.97% at 2091.06

Looking at the S&P sectors, the winners today were led by:

  • Energy, +1.2%
  • Utilities, +0.8%
  • Healthcare, +0.2%

The laggards today included:

  • Consumer discretionary -1.5%
  • Technology, -1.4%
  • Communications -0.8%
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