This is 9:31 a.m. on the 18th, EST. Today is the Day of the Four Witches, when derivatives expire. It was a volatile day, but all three major index futures showed a decline before the open. If you look at the news, James Bullard, the FOMC member and St. Louis Fed President, who decides the US benchmark interest rate, said that he thinks the interest rate should exceed 3% this year. This means that the Fed should raise interest rates by a greater margin than the rate hike expected by the Fed.
Lets take a look at the contents. “The combination of strong real economic performance with unexpectedly high inflation means that the current FOMCs policy rate is too low to manage the US macroeconomic situation carefully.” Its especially heavy for those with limited ability to adapt to the rising cost of living, Bullard said.
Considering the current economic situation in the US, it seems to reflect the fact that a stronger monetary policy than the market is needed to catch inflation expectations. In addition, it is worth noting that Fed Director Christopher Waller said in an interview with cnbc today that a so-called big step, raising the key rate by 0.5 percentage points at a time, may be necessary to catch inflation.
There are still several uncertainties, including the Russian issue, and even taking into account Fed President James Bullards propensity, the market can accept it as a sign that calls for a more hawkish move from within the Fed may continue.
Lets take a look at the movements and indicators of stocks that stood out at the beginning of the day. With the exception of Boeing, most large-cap stocks are down in the free market. Boeing, the ticker of BA, has risen more than 1.5% on news that it is being discussed to supply a 737 Max aircraft to Delta Air Lines.
The stock price of GameStop, a representative meme stock in the US market and familiar to domestic investors, plummeted after the earnings announcement. Although this quarters earnings came out in line with sales of $2.25 billion, it broke the markets expectation that the operating profit would turn to the black, and released a bad report of $1.86 per share in net loss. GameStop is down more than 9% in pre-open trading.
