The rally turned sour this afternoon as Powell donned his hawkish feathers to appear before lawmakers, says Chris Beauchamp, chief market analyst at online trading platform IG.
Stocks go into reverse as Powell comments knock risk appetite
“Stocks came into today looking fairly confident, and aiming to build on last week’s late gains. A more dovish RBA meeting seemed to provide the appetiser ahead of Powell’s testimony, but the Fed chairman has poured cold water on the rally. The Fed boss now thinks that they will have to go further and faster on rate rises, potentially moving away from the sedate 25bps pace of the last meeting. Investors haven’t given up hope altogether, and as his testimony continues have pared back some of their initial losses and equities remain in possession of most of the ground gained last week.”
Fresnillo slumps to the bottom of the FTSE 100
“It’s gloomy forecast for the year ahead had hit Fresnillo hard already, but the post-Powell dollar surge and accompanying slump in precious metals added to the woe. Most of the gains from last year have now gone, and with the dividend cut too the shine has really come off the shares for the time being. Should the dollar bounce go further from here then we can expect more losses for the shares.”
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