Slower Rate Hikes Possible, Fed Minutes Show

  • Market Overview

Wall Street rose after meeting minutes from the US Federal Reserve showed that policymakers believed slower interest rate cuts could be more plausible going forward. “The November meeting minutes also showed that policymakers were growing concerned about the economy's health. Meanwhile, since that meeting, markets have parsed a slew of economic data that somehow reinforced the view of a 50 bps hike in December. US business activity contracted for a fifth straight month in November, with a measure for manufacturing dipping below the 50-point mark for the first time since 2020. At the same time, weekly jobless claims rose more than expected to a three-month high,” Trading Economics noted.

The local and European markets closed in the green before the release of the Fed minutes last night at 21h00. Better-than-expected PMI data out of Europe showing that economic woes on the continent were easing slightly helped major European markets close in the green. The local bourse closed shy of 1% supported by tech and resource counters. While a weaker US dollar and expectations of aggressive interest rate hikes by the South African Reserve Bank boosted the rand , which traded at R16.98/$ at 21h30.

“Growing speculation that China may soon end the regulatory crackdown on the technology sector” boosted Asian markets on Wednesday, with Japan’s Nikkei rising by 0.61%, Hong Kong Heng Seng by 0.68% and China’s Shanghai Index by 0.26%.

Tight global supplies of oil and worries about demand from the second largest economy in the world caused the price of Brent crude to fall somewhat on Wednesday, while gold firmed on a softer greenback.

PSG Wealth Daily Investment Update, 24 November 2022

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