The markets finally got more information from the Federal Reserve on Wednesday, as the Fed held, but with a “hawkish tone.” The situation in the Middle East continues to be an issue, not only for oil, but for bond markets as well. The earnings calls for two of the biggest stocks in the United States diverged drastically.
- The Federal Reserve held rates on Wednesday, with a 9-3 vote. This was more of a move towards hawkishness than the previous 12-0 vote, but the real story could be the 30-year Treasury bond spiking higher, as bond traders signaled concern that the central bank isn’t prepared to lower inflation with interest rate hikes.
- Crude Oil jumped to just under $86 on Wednesday but is seeing a little bit of relaxation in Asian trading. The situation continues to be influenced by the flare-ups in the Middle East and continues to see steady, elevated volume.
- Meta fell hard after a disappointing earnings report, sending price targets lower for many analysts on Wall Street. The stock dropped almost 8% immediately after the results of the earnings call, which was a miss on the EPS, but a beat on revenue. Its weight in the NASDAQ could have an influence on Thursday trading.
- On the other hand, we have seen Microsoft jump over 3% after earnings, as it reported that its Azure service topped $100 billion in revenue for the first time. EPS of $4.74 was much better than the expected $4.25, and revenue of $90 billion had traders clapping. Capex was $41 billion, less than the $42 billion expected. This will possibly create a counterbalance to the issues surrounding Meta.
- Gold continues to see range-bound trading, as the push/pull between headlines in the Middle East and the safety trade plays out. The $4,000 level remains important, and although the market has rallied, it continues to see a bit of an overhang as well.