US stock markets recovered as investors continue to digest news that the Federal Reserve will seek to move interest rates above 3% whilst reducing the size of their balance sheet by as much as US$1 trillion this year.
Bond markets don’t appear to believe comments that this will not trigger a recession, but equity markets were buoyed with the S&P 500 outperforming, gaining 0.4%, the Dow Jones climbed 0.3% and the Nasdaq finished just positive.
The 10-year and 30-year bond yields have moved beyond 2019’s highs ahead of an important earnings season ahead.
Berkshire buys into HP
Shares in computer maker HP Inc (NYSE: HPQ) jumped by close to 15% after Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) disclosed they had purchased an 11% stake in the company, investing some of their massive cash holdings.
Meanwhile, challenger bank SoFi Technologies (NASDAQ: SOFI) fell by more than 7% following the moratorium on student loan repayments, which will hit profits.
More defensive companies including Merck (NYSE: MRK), Walgreens (NASDAQ: WBA) and Home Depot (NYSE: HD) continue to outperform, up 2.2%, 1.8% and 1.4%, respectively, on Thursday.
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is set to follow this positive lead from US stock markets to open higher this morning. For a round-up of the latest news, check out my ASX 200 morning report.
