Stocks rallied back during “Turnaround Tuesday”...and they’re gaining more ground on “Walk-It-Up Wednesday” so far. Crude oil is higher, while gold and silver are mixed. Treasuries are falling as Monday’s panic buying in bonds is being unwound.
The markets pushed back BIG TIME when the Bank of Japan launched last week’s surprise interest rate hike. Then overnight, the BOJ caved to the markets. Deputy Governor Shinichi Uchida noted the “extremely volatile” reaction to its hike in financial and capital markets globally, and said “the bank needs to maintain monetary easing with the current policy interest rate for the time being” in response.
Translation: Sorry we just tanked Japanese stocks the most since the 1987 stock market crash. We won’t do it again. The Japanese yen fell 2% against the dollar in response, while the Nikkei 225 Index rallied another 1.2%. Here in the US, the iShares MSCI Japan ETF (EWJ) is down slightly on the year, but rising more than 3% in the early going today.
iShares MSCI Japan ETF (EWJ)
Meanwhile, US mortgage rates are falling. Yes, FALLING. The rate on the average 30-year fixed rate loan sank 27 basis points to 6.55% in the most recent week, according to the Mortgage Bankers Association. That was the biggest one-week plunge in two years, and it leaves the typical home loan cheaper than at any time since May 2023. Homebuilding stocks have performed well recently, with the SPDR S&P Homebuilders ETF (XHB) rising 10% in the last month.
Finally, on the earnings front, we got a mixed bag of reports overnight. Lyft Inc. (LYFT) disappointed along with Airbnb Inc. (ABNB), sending shares of both companies into the soup. But Shopify Inc. (SHOP) soared on strong revenue growth. Momentum darling Super Micro Computer Inc. (SMCI) first surged, then sank, on its latest report – and was recently down about 13%.
