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Stocks Turn Lower after Fed Minutes

Stocks Turn Lower after Fed Minutes
The catalyst for the late-day selloff was Fed meeting minutes.
Feb 22, 2018 By Simon Herrmann Tags: Stocks for Breakfast

U.S. stocks traded higher for most of the day but declined in the final hour of trading erasing all of the session's gains.

The catalyst for the late-day selloff was Fed meeting minutes that painted the picture of a central bank increasingly confident that economic growth will pick up steam but still concerned inflation could miss targets. The initial reaction saw stocks jump with bonds, while the dollar fell.

Assets reversed course as investors pointed to economic data subsequent to the gathering that upend the idea of lagging inflation. The S&P 500 Index erased a gain that topped 1 percent to finish at a one-week low and Bloomberg’s dollar index climbed a fourth day. The 10-year Treasury yield rose to 2.94 percent.

Crude oil prices decreased less than 0.5 per cent while gold traded stable after falling on Tuesday.

The markets at a glance:

  • The S&P 500 fell 0.6 percent at 4 p.m. in New York.
  • The Nasdaq 100 fell 0.3 percent, after rising as much as 1.5 percent.
  • The Cboe Volatility Index fell 2.6 percent to 20.07.
  • The Stoxx Europe 600 Index erased losses to close higher by 0.2 percent.

Source: Bloomberg, Iress, Reuters, SMH, wise-owl

Earnings Season in Full Swing; ASX Closes Up

The ASX had an up-and-down session but finished marginally higher as the market welcomed Wesfarmers' earnings announcement. With earnings season in full swing, a number of stocks appreciated strongly after reporting including Corporate Travel Management, A2 Milk, Lendlease or Stockland.

EML Payments tumbled 20 per cent as the market reacted to the company's half year results - which were generally positive but the company flagged a few delays and downgrades - which coupled with an exuberant valuation triggered a selloff.

The S&P/ASX 200 eked out a 2.8 point gain to 5,943.7. The Small Ordinaries gained 0.4 per cent.

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Simon Herrmann Author: Simon Herrmann Feb 22, 2018

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

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Author: Simon Herrmann Feb 26, 2018

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