Investors Cheer Fed’s Promise To Raise Rates As Dow Futures Climb 200 Points

U.S. stock futures jumped higher as with investors applauded the Fed’s latest monetary policy announcement.

Federal Reserve Chairman Jerome Powell finally expressed concern over rampant inflation that is shaking up the U.S. economy in a speech Wednesday, promising to address the issue by pulling back on the Fed’s aggressive monetary policy and hiking rates in 2022.

“The inflation that we got was not at all the inflation we were looking for,” said Powell, adding that “with inflation as high as it is, we have to make policy in real-time.”

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Fed members upped their rate hike forecasts; 12 Federal Open Market Committee members now expect three rate hikes in 2022. Conversely, in September, half the members expected just one rate hike in 2022.

Despite rampant inflation, most investors seem to believe that the Fed will be able to raise rates without tanking the economy.

Speaking on this podcast Wednesday, Trish Regan applauded the decision. The anchor of The Trish Regan Show has pushed for months for the Fed to recognize the mass inflation that has seeped into the U.S. economy and though she said, this was “the right move for the Fed to take,” she did question if the timing had a certain futility to it given, that it’s coming “just as Joe Biden aims to spend trillions in social spending.” Listen to Regan’s podcast HERE.

Investors will also be looking at last week’s jobless claims data. Experts expected initial claims to be at 200,000, compared to 184,000 last week.

Level Chg. Chg. %
DOW Futures 36,040.00 230 0.64%
S&P 500 Futures 4,733.00 33 0.70%
Nasdaq Futures 16,399.25 114.5 0.70%

U.S. Dollar and Treasuries

The yield on the 10-year Treasury rose one basis point. Due to the fact that investors already priced in the rate hike, the dollar actually weakened.

Price Chg. Chg. %
U.S. Dollar Index (DXY): 96.03 -0.48 -0.50%

 

Yield Change Previous close
U.S. 1 Year Treasury Bill 0.287% 0.02 0.268%
U.S. 5 Year Treasury Note 1.240% -0.008 1.248%
U.S. 10 Year Treasury Note 1.469% 0.011 1.457%

 

Stocks To Watch

Hydrogen fuel cell provider Plug Power partnered with a Korean EV maker Edison Motors to develop an electric city bus.

Cathie Wood’s Ark Investment Fund bought shares of Roblox and Roku, after shares of the two companies fell sharply. Shares of gaming company Roblox fell 9% and shares of a streaming hardware company Roku fell 8% on Wednesday. Both companies rose in premarket trading on the news.

Shares of Rivian rose in premarket trading ahead of its fourth-quarter earnings reports.

Social media company Reddit filed plans to go public to the U.S. Securities and Exchange Commission on Wednesday. With some 52 million daily active users, the IPO could be worth as much as $15 billion.

Symbol Company Name Price Chg. % Volume
PLUG Plug Power Inc. $33.01 5.26% 189.11K
ROKU  Roku Inc. Cl A. $207.51 1.75% 22.1K
RBLX Roblox Corp. $100.97 3.08% 131.9K
RIVN Rivian Automotive Inc. Cl A $117.14 1.86% 66.6K

 

Commodities To Watch

Oil rose as U.S. demand outweighs virus concerns. Gold rose more than 1% the weaker dollar. 

Resource Price Chg. %
WTI Crude Oil $71.22 0.49%
Brent Crude Oil $74.27 0.53%
Natural Gas $3.93 3.39%
Gold $1,783.70 1.09%
Silver $22.17 2.90%
Copper $4.31 3.00%

 

Crypto

Crypto markets rose on the Fed decision, as Bitcoin surged from $46,000 to $49,000. This is because markets are already priced in a major rate hike.

The global crypto market cap is $2.28T, a 3.81% increase over the last day. Bitcoin’s dominance is currently 40.75%, a decrease of 0.78% over the same period.

Currency Symbol Price Chg. % Market Cap.
Bitcoin BTC $49,184.78 +2.51% 929.71b
Etherium ETH $4,071.87 +6.02% 482.05b
Binance coin BNB $543.06 +3.90% 81.64b
Solana SOL $186.89 +13.58% 57.52b
Cardano ADA $ 1.318 +6.20% 41.02b

 

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