Miners were again the main drag on the stock market on Tuesday after the head of the US Federal Reserve, Jerome Powell, left the door open to a reacceleration in the pace of interest rate hikes from 25 basis points per meeting back to 50bp.
The US dollar index ran up on the back of his remarks and by 1609 GMT was standing up 0.89% on the day at 105.29 and again bumping up against its 50-day moving average.
In response, front-dated gold futures on COMEX were coming off by 1.73% to $1,822.50/oz., those for silver were down by 3.97% to $20.30/oz. and those for platinum by 4.42% to $936.01/oz..
Copper futures were also lower, falling by 2.43% to $3.9890 per pound, hitting shares of industrial miners.
Worth noting, key reports on the US jobs market were due out over each of the next three session, starting with the JOLTS report on job openings on Wednesday, weekly jobless claims on Thursday and what many considered to be the all-important monthly non-farm payrolls on Friday.
Also key would be the February consumer price report due out on 14 February.
Some economists believed hiring would soon downshift even more noticeably but thus far several factors, including much warmer than usual weather in January, had served to boost labour demand. February had also been warmer than usual but not by nearly as much.
And for some observers, the key phrase from Powell’s semi-annual testimony before the US Senate banking Committee was: “We will continue to make our decisions meeting by meeting, taking into account the totality of incoming data and their implications for the outlook for economic activity and inflation.”
They interpreted the reference to the “totality” of data as meaning that the bar to a reacceleration was high, but the mix of warmer weather, seasonal adjustment problems with the data and other factors meant that economists were being more wary than usual in their near-term forecasts.
Furthermore, for Powell, warm weather notwithstanding, “the breadth of the reversal along with revisions to the previous quarter suggests that inflationary pressures are running higher than expected at the time of our previous Federal Open Market Committee (FOMC) meeting.”
Top performing sectors so far today
Automobiles & Parts 2,120.45 +4.19%
Industrial Transportation 4,234.92 +1.90%
Food Producers 6,794.65 +1.01%
Life Insurance 7,656.90 +0.75%
Pharmaceuticals & Biotechnology 20,554.86 +0.75%
Bottom performing sectors so far today
Precious Metals and Mining 10,067.04 -3.75%
Industrial Metals & Mining 7,307.83 -2.57%
Telecommunications Service Providers 2,533.54 -1.82%
Real Estate Investment Trusts 2,369.16 -1.36%
Industrial Engineering 15,541.24 -0.97%
