Wealth Daily 27 January 2022




WEALTH DAILY 2022-01-27
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Shares on Wall Street mostly fell on Wed. Policymakers at the US Federal Reserve finished their Jan meeting. The major equity indexes were solidly in positive territory ahead of the results of the meeting and stayed in positive territory even after the Fed’s policy statement was released. The Fed left interest rates unchanged, and signaled that they will raise rates in two months.


It was only after Fed Chair Jerome Powell made his post meeting comments that shares moved into negative territory. Powell suggested the central bank has plenty of room to raise interest rates before it would harm the economy. 


The Dow Jones Industrial Average lost 129.64 pts, or 0.38%, to close at 34,168.09. The S&P 500 index fell 0.15%. The tech-heavy Nasdaq Composite finished 0.02% above the flat line. The small cap Russell 2000 dropped 1.38%. 


Interest rate swaps indicate that traders are now pricing in around 30 bps of tightening in Mar, implying around a 20% chance of a 50 bp hike. The 10-year Treasury yield note notched up 9.48 basis points (bps) to 1.8637%. 


Gold fell the most in almost three weeks. The most actively traded US gold futures (Feb) contracts settled down $22.80, or 1.2%, at US$1,829.70/oz. March silver, which is the most actively traded silver futures, fell 8.9 cents, or 0.4%, to end at US$23.807/oz. 


Palladium soared as much as 8.3% to its highest level in four months, with traders looking to secure supplies amid growing tensions over Ukraine as Russia, the top metal producer, amassed troops near the border. 


The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, rose 0.55% to 96.478. 


Brent oil surged above US$90 for the first time in seven years as the market fretted over Russia-Ukraine tensions. The front-month Brent and WTI futures closed up $1.76 at US$89.96/bbl and $1.75 at US$87.35/bbl respectively. 


European equity markets finished higher on Wed. The UK FTSE gained 1.33%, France's CAC 40 rose 2.11%, while the German DAX advanced 2.22%.