Sharechat Logo

While you were sleeping: Brainard adds to rate bets

Friday 3rd March 2017

Text too small?

 Wall Street fell from record highs, while the US dollar gained, as another Federal Reserve official boosted bets the central bank will raise interest rates at its meeting this month. 

A Labour Department report showed initial claims for state unemployment benefits fell 19,000 to a seasonally adjusted 223,000 for the week ended February 25, the lowest level since March 1973.

“We are closing in on full employment, inflation is moving gradually toward our target, foreign growth is on more solid footing, and risks to the outlook are as close to balanced as they have been in some time,” Fed Governor Lael Brainard said in prepared remarks for a speech on Wednesday. “Assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path.”

Traders are now pricing in a 90 percent chance of a rate increase at the March 15 decision, Fed fund futures showed, according to Bloomberg. 

Fed Chair Janet Yellen is slated to speak on Friday. 

Wall Street slid. In 1.20pm trading in New York, the Dow Jones Industrial Average fell 0.3 percent, while the Nasdaq Composite Index shed 0.6 percent. In 1.05pm trading, the Standard & Poor’s 500 Index slid 0.4 percent.

"It seems like after yesterday's surge, there is no real news out there this morning and it is almost like the market's simply taking a breather," Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina, told Reuters.

Declines in shares of Caterpillar and those of Microsoft, recently down 5.6 percent and 1.6 percent respectively, led the Dow lower. 

Caterpillar had its offices raided by law enforcement officials. Searches were conducted Thursday in Peoria, East Peoria and Morton by the Internal Revenue Service, the Federal Deposit Insurance Corp and the Commerce Department, Sharon Paul, a spokeswoman for the US attorney’s office for the Central District of Illinois, told Bloomberg. Paul said she couldn’t provide details on the nature of the raid.

“Law enforcement is present in various Peoria-area Caterpillar facilities executing a search warrant,” Caterpillar said in a statement, according to media reports. “Caterpillar is cooperating.”

Shares of Kroger slid after the largest grocery-store chain in the US posted an unexpected decline in same-store sales for the fourth quarter.

"With peers Ahold Delhaize, Walmart and Publix reporting better comparable sales than Kroger, it is becoming increasingly likely that the company is losing overall market share," JP Morgan analyst Ken Goldman said, according to Reuters.

"We are disappointed in the comparable number and are starting to wonder how Kroger will get anywhere near its long-term outlook for 8-11 percent earnings per share growth in today's environment," Goldman noted.

Shares of Kroger traded 3.2 percent weaker as of 11.55am in New York.

Bucking the trend, shares of Snap jumped in their first day of trading. The owner of Snapchat traded at US$25.33, 49 percent higher than its US$17 offering price.

"The environment is terrific. Animal spirits are running through the streets here. What better time to price,” Stephen Massocca, senior vice president at Wedbush Securities, told Reuters. 

In Europe, the Stoxx 600 Index finished the day with a decline of less than 0.1 percent from the previous close.The UK’s FTSE 100 Index inched 0.01 percent lower, while France’s CAC 40 Index slipped 0.1 percent.

Germany’s DAX Index eked out a 0.1 percent gain.

Shares of Anheuser-Busch InBev closed 2.5 percent weaker in Brussels after the brewer posted another quarter of disappointing earnings. 

It's "another shocker, but that's the trough," wrote Eamonn Ferry, an analyst at Exane BNP Paribas, according to Bloomberg. "We had feared the worst this quarter, and so it is. There may well be an element of kitchen-sinking here.”

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite
ANALYSIS: Why banks don't pass on full OCR cuts
NZ Europeans make up 80% of business leaders, survey shows
Zespri tries to whet American appetite for kiwifruit
MARKET CLOSE: NZ shares fall as Pushpay follows Aussie software firms lower

IRG See IRG research reports