March 7, 2023: Markets Looking for Powell’s Testimony Before Congress

European stocks fell amid anticipation of Powell’s statements.

European stocks fell in early trading on Tuesday amid investors’ anticipation of US Federal Reserve Chairman Jerome Powell’s testimony before Congress today and economic data release.

The Stoxx Europe 600 index fell by 0.15% to 463 points at exactly 08:12 GMT. The British FTSE 100 index declined by 0.12% at 7920 points, the German DAX settled at 15654 points, and the French CAC fell 0.28% at 7352 points.

House prices in Britain in February, as measured by the Halifax Index, rose 1.1% month-on-month after rising 0.2% in January.

Official data showed that German factory orders rose unexpectedly in January, up 1% monthly. Factory orders from the Eurozone fell by 2.9%, while orders from other countries increased by 11.2%.

Nikkei touches 3-month high as investor sentiment improves.

The Nikkei Japanese index rose, hitting its highest level in three months Tuesday, March 7. While the broader Topix index reached its highest level since late 2021 as investor sentiment improved, supported by the decline in long-term US Treasury yields.

Analysts said uncertainty limited the gains ahead of US Federal Reserve Chairman Jerome Powell’s testimony before Congress later in the day and the release of the US jobs report on Friday. The current Governor of the Bank of Japan, Haruhiko Kuroda, made his last decision on interest rates before leaving office this week.

The Nikkei index closed up 0.25% at 28309.16 points after touching the level of 28398.27 during the session, its highest level since December 1.

The broader Topix index rose 0.42% to close at 2044.98 points after scoring 2046.11 points, its highest level since November 2021.

US Treasury yields for ten years lost more than they gained last night, to be traded at about 3.95% in Tokyo after hitting a multi-month high of 4.091% last week.

Gold moves cautiously ahead of Powell’s testimony.

Gold prices stabilized on Tuesday as investors await the testimony of “Jerome Powell,” Chairman of the US Federal Reserve, before Congress, looking for clues about the future of interest rates.

The yellow metal futures contract for April delivery settled at $1852.9 an ounce at 08:36 GMT, and the spot delivery price settled at $1846.74 an ounce.

Silver futures for May delivery settled at $21.15 an ounce, while the spot price of platinum fell 0.48% at $974.56, and palladium fell 0.91% to $1434.95.

Powell is scheduled to give semi-annual testimony before Congress on Tuesday and Wednesday, which will be closely watched for hints about how tight the US central bank would seek.

Market expectations have risen that the Federal Reserve will raise interest rates by 25 basis points at its next meeting on March 21, with an increase to 5.465% in September.

Oil prices continue to rise for the sixth consecutive session.

Oil prices rose on Tuesday after industry officials at the CERAWEEK energy conference in Houston cited concerns about limited spare capacity in the market and uncertainty about Russian supplies while recovering demand from China, the largest importer of crude.

OPEC Secretary-General Haitham Al-Ghais had dinner with the heads of US shale oil companies, and the conversation focused on concerns about global supplies.

Brent crude prices are high for the sixth consecutive session, the longest period of gains since May 2022, supported by hopes for demand recovery in China and with the increase of new refining capacity in Asia and the Middle East.

Chevron Corp. CEO Mike Wirth said ships carrying Russian crude and products must travel longer distances to reach non-sanctioned markets. At the same time, volatile oil and supply stocks are limited, leaving the global market vulnerable to unexpected supply disruption.

Brent crude futures for May delivery rose 0.48% to $86.59 a barrel at 06:01 GMT. US crude futures for April delivery rose 0.47%, at $80.84 a barrel.

Attentive trading in US stocks ahead of the testimony, and Apple’s stock reverses the trend.

US indices recorded limited gains in Monday’s session after US Treasury yields rose again amid anticipation of Federal Reserve Chairman Jerome Powell’s testimony and the February jobs report.

Powell will testify before Congress on Tuesday and Wednesday, where he will likely be asked if a more considerable rate hike is needed in the country. The Labor Department is expected to release the February employment report on Friday.

US stocks also gave up early gains after data showed new orders for manufactured goods in the US fell less than expected in January, reinforcing concerns about the Fed’s decision to raise interest rates.

The S&P500 index rose by 0.07% to remain at 4048 points. Among the 11 leading industrial sectors of the S&P500 index, six sectors ended the day on the rise.

The Dow Jones rose by 0.1%, or 40 points, recording its fourth consecutive daily rise to 33431 points. The Dow Jones touched the 50-day moving average of 33,540 points before trimming its gains and closing below it.

The Nasdaq Composite Index fell by 0.1% to close at 11,675 points after rising by about 1% during the session, but it gave up its gains after the rise in bond yields.

Except for the technology sector, all other significant sectors gave up their gains on Monday and closed in the red, led by the government activities sector, which lost 22% of its value.

Apple’s stock jumped by about 2% in Monday’s session, reversing the downward trend of most US stocks, recording a third consecutive daily rise, and closing at its highest level in 3 weeks.

The support came from Morgan Stanley, which recommended buying Apple’s shares. Morgan Stanley had said at the end of last week that Apple’s stock could rise by more than 20% in the next 12 months after it raised the company’s target price from $175 to $180 with the support of the demand: iPhone pent-up, service growth, and new service launches.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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