ASX remains red at lunchtime after Wall Street rally fails

Medibank faces substantial compensation claims following adverse results from investigations by the Office of the Australian Information Commissioner (OAIC) ​​and independent reports from Deloitte.

wall street wobble

The bleak start followed last night’s shaky Wall Street trading, with the stocks finishing near-high. The S&P 500 rose 0.3% after turning from his 1.8% gain the day before to his 0.4% decline. The Dow Jones posted his marginal gain of 0.2%, but the strength of tech and high-growth stocks helped the Nasdaq Composite outperform other markets.

Stocks plunged yesterday after the Federal Reserve (Fed) signaled that its market-shaking rate hike may be coming to an end, but it has no plans to cut rates yet this year. Markets lost momentum after Fed Chairman Jerome Powell said: Rates may continue to rise if inflation remains high.

But traders on Thursday were still largely betting that the Fed would cut rates later this year. Such cuts could act like market steroids, driving up the prices of stocks, bonds and other investments. It not only eases pressure on the economy, but also has the potential to further accelerate inflation.

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On Wall Street, big technology stocks and other high-growth stocks, which tend to be the most beneficiaries of lower interest rates, were ahead. Nvidia was up 2.7%, Microsoft was up his 2%, and Apple was up 0.7%.

Some analysts said Treasury Secretary Janet Yellen’s comments that may have cut bank shares on Tuesday were not too different from what she had previously said.

She said the government is not considering comprehensive protection for all customers of all banks. yeah. But Yellen said the government would bank all depositors on a case-by-case basis, but not doing so would put the entire system at risk.

Most stocks in the financial industry rose after falling the day before. But First Republic Bank, which has been at the center of investor sights in recent weeks due to the industry crisis, has been yo-yoing. After gaining nearly 10% in the morning, it closed 6% lower.

The second and third largest U.S. bank failures in history occurred earlier this month after customers of Silicon Valley and Signature banks rushed to withdraw their money en masse.

The concern is that all the turmoil in the banking industry could lead to a sharp setback in small business lending across the country. This could add pressure on the economy and increase the risk of a recession, which many economists already considered probable.

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Federal Reserve Board member Powell said such concerns were part of the reason the central bank did not raise interest rates on Wednesday, but only raised them by a quarter of a percentage point. A reduction in lending could act almost like a rate hike on its own, he said.

In overseas markets, London stocks fell 0.6% after the Bank of England raised key interest rates by a quarter of a percentage point. Inventories were mixed across Europe and the rest of Asia.