The futures were higher after the expected increase in the federal funds rate of 25 basis points took the current level to 5.00% to 5.25%, the highest in 17 years. The major indexes closed lower, with the exception of the small-cap Russell 2000. While Federal Reserve Chair Powell gave some indication in his remarks that the Fed may be done hiking rates for this cycle, it is a solid bet that one more rate hike could still come in June if the data continues to remain hot, which he also alluded to. The coming jobs numbers for April could be a leading indicator, especially after the ADP job numbers came in higher than expected on Wednesday.
Treasury yields were lower across the curve, as worried buyers continued to buy any and all maturities. Ongoing concerns over the banking industry and the pending debt ceiling emergency have made the safe-haven government bond trade popular in a big way. The yield on the benchmark 10-year note closed at 3.40%, the lowest since early April. The short two-year paper finished the day at 3.83%. While tightening dramatically this week, the ongoing inversion signals recession is on the way.
Brent and West Texas Intermediate crude closed lower again Wednesday, both down over 4%, after being hammered to the tune of 5.5% on Tuesday. Concerns over China’s growth and the potential for an economic slowdown in the United States have weighed on pricing across the energy complex. Iran seized another oil tanker Wednesday, for the second time in a week, and that tail risk put some support under the major benchmarks. Natural gas closed down over 3% at $2.16.
Gold remained the big winner, as the commodity continued to race toward the all-time high of $2,075 that was hit back in August of 2020 when the COVID-19 pandemic started to really pick up speed. The bullion finished Wednesday at $2,030. Bitcoin closed down on the day at $28,532.
24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top analyst upgrades, downgrades and initiations seen on Thursday, May 4, 2023.
Advanced Micro Devices Inc. (NASDAQ: AMD): Craig Hallum upgraded the chip leader to Hold from Buy, and it raised its $76 target price to $100. The consensus target is $90.32. The stock closed down over 9% on Wednesday at $81.62 after posting solid results, though chip sales crashed 64%.
Amcor PLC (NYSE: AMCR): Though J.P. Morgan upgraded the stock to Overweight from Neutral, it trimmed its target price to $10.80 from $11.60. The consensus target is $11.86 for now. Wednesday’s $10.01 close was down over 8% on the day after reporting inline earnings results.
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