Marcus Today Pre-Market Podcast – Thursday 15th June

US equities closed mixed overnight after some choppiness and heavy trading volume in the afternoon following the FOMC meeting. The Dow fell 233 points (-0.68%), weighed down by United Health. Dow at worst down 429 points. S&P 500 flat, up 0.08%, and the NASDAQ rose 0.39%. Long-dated US treasuries fell, 10Y and 30Y yields slipped 4.9bps and 6.4bps. USD Index off 0.38%, and Walls Streets fear gauge the VIX fell 5.0%. European markets finished up, with the STOXX 50 +0.7%, FTSE +0.1%, CAC +0.5%, and DAX +0.5%.

The Fed Hits Pause
After ten consecutive rate hikes over the year, the Fed has officially hit “pause”. The Fed announced it will be leaving the benchmark federal funds rate at 5-5.25%, its highest level since 2007. The Fed’s new projections show policymakers at the median see the fund’s rate rising to a 5.5-5.75% range by the end of the year (another two hikes). Policymakers anticipate a 100 basis points of rate cuts next year, alongside fast-falling inflation. Futures markets are already pricing in 64.5% chance rates rise by 25bps at the July FOMC meeting.

• US Producer Price Inflation fell 0.3% MoM in May following April’s 0.2% rise, significantly exceeding forecasts for a 0.1% fall.
• Chipmakers Nvidia and Broadcom are both up more than 4%, closing at highest levels ever.
• Philadelphia Semiconductor Index up 1.5%, bringing its YTD gain to 48%.
• United Health down 6.4%, after the company announced its costs were on the rise due to an increase in surgeries among older adults. Wiping out ~US$29bn in market capitalisation.
• Gold steadied as the Fed signalled more rate hikes ahead.
• Copper gained 0.46% on expectations of Chinese growth.
• WTI crude dropped 1.69%, and Brent lost 0.89% as US inventories surged ahead of expectations.
• Zinc rose 4.35% overnight as Boliden suspended operations at a major Zinc mine in Ireland.
• Nickel +3.5%, Aluminium +0.83%, Lead +1.73%, Tin +2.6%.
• Bitcoin fell 2.9% overnight.
• 10-year yield: US 3.79%, Australia 3.96%, and Germany 2.46%.
• Shell PLC rose 1.2% overnight after announcing it will hold oil output steady, grow gas and LNG business and increase dividends.
• EU regulators may order Google to sell part of its adtech business to address anti-competitive practices, potentially facing a fine of up to 10% of its annual global turnover.

Catch up on all the latest with Henry Jennings on today’s Pre-Market Podcast.

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