DAILY MARKET UPDATE

August 17, 2022

The overnight session did start out on a positive note with Asian equity markets rising pretty much across the board. We heard more pro-economic growth stories out of China with reports that China Premier Li requested local officials from six key provinces to boost pro-growth measures after the run of softer data we have seen. I would expect more fiscal and monetary support out of China as we head toward this Fall’s Communist party gathering and that can’t be a bad thing for growth. Sentiment shifted in Europe though on the UK CPI data (U.K. headline CPI came in at an eye watering 10.1% this morning, higher than the 9.8% expected; core higher at 6.2% as well) and of course we still have all the other things dragging Europe down including sky high gas and electricity prices. After coming under pressure early in the North American session, stocks staged a recovery attempt in afternoon trading on Wednesday but still ended the day firmly in negative territory. The major averages all moved to the downside following the mixed performance seen on Tuesday. The failed recovery attempt came after the Federal Reserve released the minutes of its latest monetary policy meeting, which some traders seemed to interpret as pointing to a slowdown in the pace of interest rate hikes. The Fed minutes reaffirmed the central bank’s plans to continue raising interest rates in an effort to return inflation to its 2 percent objective. The minutes did not provide specific guidance regarding the pace of future rate hikes, noting that the extent of future policy tightening would depend on the implications of incoming data for the economic outlook and risks to the outlook. The Fed did reveal that meeting participants believed it would be necessary to move to a “restrictive stance of policy” due to inflation remaining well above the Fed’s objective. At the same time, the Fed said participants judged that it would eventually become appropriate to slow the pace of interest rate hikes in order to assess the impacts of higher rates on economic activity and inflation. The minutes showed some participants also expressed concerns the Fed could tighten the stance of policy by more than necessary to restore price stability.

Markets:

* Nikkei +1.23%

* Shanghai Composite +0.45%

* Hang Seng +0.46%

* DAX -2.04%

* FTSE -0.27%

* CAC -0.97%

* DJIA -0.50%

* S&P 500 -0.72%

* Nasdaq -1.25%

* Russell 2000 -1.64%

BSD Global Tech Hedge Fund -0.29%