Morning Report | Meta’s market value shrinks by a third in three days!Facebook and other products may be closed in Europe
Goldman Sachs and Citi advise investors not to bet on a sharp Fed rate hike in March
Analysts at Goldman Sachs and Citi agree that the Fed is unlikely to take aggressive action, suggesting a trading strategy that could benefit from a 25 basis point rate hike. one way to do that is to sell overnight interest rate index swap (OIS) contracts that expire in December and buy June contracts, say Goldman Sachs strategists such as Praveen Korapaty. That is, betting on higher expectations for a December rate hike, which is likely to occur if the Fed chooses to make a more modest hike in March. Citi’s baseline forecast is also for a 25 basis point rate hike in March, and they recommend a strategy similar to Goldman’s in the European dollar futures market, where the June 2023 contract is expected to run ahead of the June 2022 expiration contract.
Bank of America strategists throw cold water on stocks, warning of the risk of Fed rate hikes bumping up against market overvaluation
Bank of America strategists warned that some optimists expect the stock market to ride out the rate hike cycle as comfortably as it has in the past, but they are wrong on one important detail. A team of strategists led by Savita Subramanian wrote in a report that while U.S. stocks have made positive returns during previous rate hikes, the main risk this time is that the Fed’s “tightening coincides with a period of overvaluation in the market. Because “the S&P 500 before the first rate hike of the current round is more expensive than any other rate hike cycle other than the 1999-2000 period. These strategists believe that the closest historical precedent to the current outlook is the monetary tightening cycle at the turn of the century, when stocks performed weakly as the tech bubble burst.
ECB President Lagarde pledges ‘gradual’ action, possible fall back before hyperinflation becomes entrenched
Lagarde reiterated that the ECB will not start raising interest rates before ending bond purchases. Lagarde expects inflation to fall to the central bank’s target in the medium term, and could fall back before high inflation becomes entrenched, saying it is more important to keep decisions data-dependent now that central bank officials must remain flexible and selective than ever before.
EU in talks with several countries seeking more gas supplies, pledges gas cooperation with U.S.
European Commission President von der Leyen says talks are underway with the United States and Norway, among other countries, to increase gas supplies to Europe to secure additional sources of supply. Secretary of State John Blinken and EU foreign affairs chief and High Representative for Foreign Affairs and Security Policy Borrell said at a briefing Monday that the U.S. and the EU will now cooperate to avoid supply shocks to European energy supplies, including those that could stem from Russia’s actions against Ukraine.
U.S. stock market replay
Three major U.S. stock indices mixed, most large tech stocks down
The Dow closed flat, the S&P 500 fell 0.37% and the Nasdaq fell 0.58%.
Meta falls more than 5%, threatens to pull Facebook and other products out of Europe
Tesla falls more than 1.7%, doubles year-over-year revenue in China by 2021
Dutch regulator fines Apple again, totaling 15 million euros
SoftBank’s deal to sell ARM to Nvidia for $66 billion collapses
U.S. interactive fitness platform Peloton rises nearly 21% as sources say Amazon and Nike are both considering buying the company
Frontier Airlines and Spirit Airlines announce merger, success still in doubt amid antitrust hurdles
TSN.US surges more than 12%, FY2022 earnings guidance better than market expectations
Submitted February 08, 2022 at 09:22AM by abigaillv700
via reddit https://ift.tt/nBctRSC