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Stocks Swallow Taper News, But Prospective Hike Path Tempers Progress

  • Equity markets traded positively on both sides of the pond Wednesday, with the Wall Street swallowing Fed communication that a taper of asset purchases could begin at the next meeting, with asset purchases concluding mid-2022.
  • This announcement was largely inline with expectations, but a more aggressive dot plot on rate hikes from 2022 onwards capped markets, with the e-mini S&P fading as Powell's press conference continued.
  • The S&P 500's energy and financials sector topped markets Wednesday, with more buoyant WTI and Brent crude futures pricing driving margins higher for explorers and producers. Banks and financials shrugged off a flattening US yield curve, with the likes of Wells Fargo, Charles Schwab and Goldman Sachs adding over 3% apiece.
  • European markets traded similarly positively, with the UK's FTSE-100 outperforming (up 1.50%) as the likes of Royal Dutch Shell and BP made solid point contributions.
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