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The CMLviz Close - Fed raises rates, Markets turn higher, ADP numbers were soft - 5-4-2022

Date Published:

Stocks rose after the Federal Reserve made its announcement to raise rates by 50 bps and begin shrinking its balance sheet in June. In the press conference, Powell pushed back on 75 bps rate hikes in future meetings, taming the most hawkish expectations. Stocks were down substantially before the announcement and Chairman Powell's news conference.

SPX 4,300.39 +124.91 (+2.99%)
NASD 12,964.86 +401.10 (+3.19%)
DJIA 34,061.72 +932.93 (+2.82%)
R2K 1,948.65 +49.80 (+2.62%)
VIX 25.22 -4.03 (-13.78%)
Oil 107.99 +5.58 (+5.45%)

• The Fed raised rates and announced the scale of its quantitative tightening, as Powell pushes back on 75 basis-point Fed move.
• The ADP job report numbers came in far below expectations and the lowest level in more than a year.
• The world’s No. 2 container line said the impact from China's shutdowns may not be "as much as you may expect."

Headlines of the Day
Fed chief says there’s a ‘good chance’ at a soft landing as he raises rates by 50 bps
"While maintaining a soft landing will be a challenge, Powell pointed to the resilient labor market, noting that households and businesses remain in “strong financial shape.”
Powell’s remarks ignited a in Treasuries and stocks as he dashed speculation that the Fed was weighing an even larger increase of 75 basis points in the months ahead, saying that it is “not something that the committee is actively considering.”

Maersk, which controls about one-sixth of the world’s container trade, reported earnings and losses from Russia
Maersk (world’s No. 2 container line) says its business in China is feeling the impact of Covid lockdowns, though “not as much as you may expect."

A Huge Majority of Americans Think It’s a Bad Time to Buy a House
Thirty percent of U.S. adults say it is a good time to buy a house, down 23 percentage points from a year ago and the first time the figure has been below 50%. Gallup has asked the question since 1978, including annual updates since 2003.

U.S. Freight Industry Downshifts From Hectic Pace for Shipping
Logistics managers gauge fell to lowest since January 2021. Survey-based index shows economy is cooling, not contracting

Stocks Rise After the Fed Lifts Rates
The stock market was rising Wednesday, after the Federal Reserve lifted the benchmark lending rate by 50 basis points, in line with expectations. The central bank also said it will begin reducing its bondholdings.

Economic Data Results for 5-3-2022
Fed Interest Rate Decision
Fed chief says there’s a ‘good chance’ at a soft landing. Fed Chairman Jerome Powell said Wednesday that, with the labor market being “extremely tight” and inflation “much too high,” the Federal Open Market Committee could continue to raise the Fed Funds rate over the next few months.

ADP Employment Change APR
Private businesses in the United States hired 247K workers in April of 2022, the least since April of 2020 and well below forecasts of 395K.

ISM Non-Manufacturing Prices APR
ISM Non Manufacturing Employment in the United States decreased to 49.50 points in April from 54 points in March of 2022.

United States ISM Non Manufacturing PMI
The ISM Services PMI for the US fell to 57.1 in April of 2022 from 58.3 in March and below forecasts of 58.5, mostly due to the restricted labor pool which caused employment to fall.

Economic Data Due Tomorrow on 5-4-2022
Initial Jobless Claims 30/APR

Continuing Jobless Claims 23/APR

Nonfarm Productivity QoQ Prel Q1

Unit Labour Costs QoQ Prel Q1

Get the In the Know - End of Day Market Wrap


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