To The Moon

US equities slide on hawkish interest rate commentary

· A selloff in tech stocks weighed heavily on sentiment in US markets on Wednesday, with the most-recent string of Federal Reserve speakers reinforcing the idea that interest rates will need to keep climbing to crush inflation.

· Their tone was unmistakably intended to weigh against risk-friendly interpretations of Jerome Powell’s comments on Tuesday.

· The Dow Jones Industrial Average dropped 208 points, or 0.6%. The S&P 500 declined 1.1%, while the Nasdaq Composite fell 1.7%. The Nasdaq was weighed down by an 7.4% fall for Google parent Alphabet after a technology glitch on its new artificial intelligence software disappointed investors.

· There may be more clarity on the Fed’s next move with the publication of consumer price index, retail and inflation data next week. A leading indicator of inflation for the last year has been 1-year inflation expectations as reported by the University of Michigan. A reading for that print will be out on Friday for February preliminary numbers. Friday’s print is forecast to show a modest uptick for 1-year expectations.

· Equities in Europe gave up early gains as US markets headed lower. The benchmark Stoxx 600 finished 0.3% higher, while the FTSE 100 rose 0.3%, hitting an intraday record high before easing back. Separately, the European Central Bank said it would cut the maximum rate it paid on government deposits to encourage investors to put their money in the market.

· In Asia, the Hang Seng index closed flat, down less than 0.1%, while the Chinese CSI 300 fell 0.4%. Straits Times Index inched up 0.2%.

DYODD @TigerStars