Weekly Report – January 25, 2023

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Highlight of the Week

$135 Billion to Global Money-Market Funds Over Past 4 Weeks

  • Cautious investors look to keep cash amid a recent rebound in stocks & bonds and concerns over Federal Reserve officials’ commitment to higher interest rates.
  • US money market funds are averaging 4.12% this month. The highest since the 2008 financial crisis.
  • While money market inflows are mostly attributable to the dramatic increase in rates, the inverted yield curve continues to signal a coming recessionary environment.

Rate Curves

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Rapid Report:

Abelian Brand Mark

Technical Glitch at NYSE Causes Blue Chip Stock Trading Halt

Yesterday, a technical glitch at the NYSE caused the prices of Wells Fargo, Mastercard, Verizon, and others to drop precipitously before rebounding shortly after the market opened.  A system failure occurred in the opening auction process. The opening auction determines the Open price for stocks on the exchange and without it, prices swung widely as the day began. Market rules on volatility triggered the trading halts shortly thereafter.

Mastercard fell from a market close price of $378.51 to $349.00 at the open before rebounding to $377.37 a short 5 minutes later. McDonalds saw a similar 8% drop while companies like Uber and Wells Fargo fell over 10%. Some traders reported having limit orders that would have been executed after the opening bell canceled. The SEC and NYSE are working together to correct trades and determine the cause of the issue.

Bank of Canada (BOC) Marks Potential Peak for Interest Rates

  • The BOC hiked rates by 25 bps to 4.5% and plans to hold at that level.
  • This unexpected sentiment may signal a pivot to pause rate hikes if the economic data stays in line with the expectation of a 2% inflation target by 2024.
  • The BOC raised rates rapidly last year outpacing their global peers and believe the current rate will restore price stability without the need for further increases.
  • The FOMC meets next week with the markets having priced in an expected 25 bps rate increase coming on Wednesday.
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Weekly Report – January 18, 2023
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