Asia markets falls after Fed raises rates

E-commerce growth is back, and Morgan Stanley has several stock picks for investors to money in, including a less obvious name it says has huge upside.

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— Zavier Ong

Morgan Stanley upgraded the shares of a European energy firm — and likewise raised its price goal for the stock.

Based on the bank, it has “one in every of the strongest balance sheets” and is “near debt-free.”

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— Weizhen Tan

Billionaire investor and CEO of Pershing Square Bill Ackman warned in a tweet bank deposit outflows could speed up after Treasury Secretary Janet Yellen said the FDIC was not considering expanding bank deposit guarantees beyond its current limit of $250,000.

Yellen’s comments led to a drop in regional bank shares within the U.S.

“I could be surprised if deposit outflows don’t speed up effective immediately,” Ackman wrote in his tweet.

In a separate tweet, Ackman said that he fears markets are “heading for an additional train wreck,” adding that he hopes regulators will “get this right.”

“The longer this banking crisis is allowed to proceed, the greater the damage to smaller banks and their ability to access low-cost capital,” he said.

– Jihye Lee

Treasury Secretary Janet Yellen said Wednesday that the FDIC was not considering providing “blanket insurance” for banking deposits, in response to Reuters. Yellen made the remarks at a hearing of a U.S. Senate appropriations subcommittee.

Yellen said the administration was not considering expanding bank deposit guarantees beyond the present limit of $250,000, Reuters reported. Some investors hoped such an expansion would help prevent the crisis from spreading further.

— Yun Li

The Federal Reserve hiked its benchmark rate of interest by one other 25 basis points, in keeping with Wall Street’s predictions.

This marks the central bank’s ninth hike because it began raising rates in March 2022, in addition to its first announcement following the recent fallout within the banking sector. The rise takes the benchmark federal funds rate to a goal range between 4.75%-5%.

The Federal Open Market Committee said in a post-meeting statement that it “will closely monitor incoming information and assess the implications for monetary policy.” Fed projections call for just yet another hike this yr.

— Hakyung Kim

Financial conditions appear to have tightened greater than the U.S. benchmark indexes indicate, Federal Reserve Chair Jerome Powell said during Wednesday’s press conference.

“The standard indexes are focused so much on rates and equities, they usually don’t necessarily capture lending conditions,” Powell said when asked what financial situation would warrant an rate of interest cut, especially if credit conditions were to further tighten. Concerns of a credit crunch, which occurs when banks significantly tighten their lending standards, have grown amid the banking crisis.

If tighter lending conditions are sustained, Powell acknowledged that would easily have a major macroeconomic impact which could be factored into the Fed’s policy decisions.

“The query for us though is how significant will that be and what could be the extent of it and what could be the duration of it,” he said, adding that “rate cuts will not be in our base case.”

— Pia Singh

Bitcoin hit a high of $28,790 on Wednesday, continuing the recent rally in cryptocurrency prices as investors awaited the conclusion of the Federal Reserve’s policy meeting this afternoon. That level is the very best since June 11, 2022, when bitcoin traded as high as $29,405, in response to Coin Metrics. Ether also gained 0.7% to $1,813.52. 

Shares of crypto exchange Coinbase Global were earlier up 0.4%, on pace for its eighth straight positive day after the stock has gained 37% up to now this month. It recently edged lower, down by 0.2%, to $83.80. The rally marks a reversal from Coinbase’s underperformance throughout 2022, when its shares dropped 86%.

— Pia Singh