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Wealth Daily 07 April 2022

WEALTH DAILY 2022-04-07
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Shares on Wall Street fell on Wed for a second straight day, after the release of minutes from last month’s Federal Reserve policymaking committee. 

The Dow Jones Industrial Average lost 144.67 pts, or 0.42%, to close at 34,496.51. The broader S&P 500 index fell 0.97%. The tech-heavy Nasdaq Composite retreated 2.22%. The small-cap Russell 2000 dropped 1.42%. 

The minutes did not show anything unexpected. They just confirmed that all the committees agreed on the need to aggressively hike rates and reduce the Fed’s balance sheet. The balance sheet reduction (or roll-off) will be at a maximum pace of $95b a month, faster than it has been done before. 

Mega cap tech stocks fell including those of Meta Platforms (FB US, -3.68%), Microsoft (MSFT US, -3.66%), Amazon (AMZN US, -3.23%), Alphabet (GOOGL US, -2.88%) and Apple (AAPL US, -1.85%).  However, consumer staples such as Coca-Cola (KO US, +1.01%), Procter & Gamble (PG US, +1.43%) and Walmart (WMT US, +2.32%) gained. 

The yield curve steepened as investors digested the Fed minutes. The yield on the 10-year Treasury note notched up 5.06 bps to 2.5975%. The yield on the 2- year Treasury note retreated 4.25 bps to 2.4714%. 

The front-month Brent and WTI futures closed down $5.57 at US$101.07/bbl and $5.73 at US$96.23/bbl respectively. The Paris-based International Energy Agency (IEA) said its members plan to contribute an additional 60m barrels to the oil stock release already announced by the Biden administration. 

The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, rose 0.13% to 99.599. 

The most actively traded US gold futures (Jun) contracts settled down $4.40, or 0.3%, at US$1,923.10/oz. May silver, which is the most actively traded silver futures, fell 7.6 cents, or 0.3%, to end at US$24.458/oz. 

Bitcoin (XBTUSD) slid back below $45,000. 

European equity markets finished lower on Wed. The UK FTSE lost 0.34%, France's CAC 40 fell 2.21%, while the German DAX retreated 1.89%.

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