Medicare Agent News: Stocks Get a Fed Boost

Tuesday, March 7, 2023

Stocks Get a Fed Boost

By Alex Eule Thursday, March 2

Baby Steps. After a mid-day reversal, the major indexes closed solidly higher Thursday, delivering their best gains in more than two weeks. The turnaround came around 1:30 p.m. after Atlanta Fed President Raphael Bostic pushed back against the need for a half-point rate increase at the Fed's upcoming March 21-22 meeting. "I'm still very firmly in the quarter-point move pacing," Bostic told reporters.

Investors have been increasingly worried that still-hot economic data will force the Fed to move back to larger hikes. In recent weeks, the futures market has priced in a 30% chance of a half-point hike later this month, something no one thought possible just a month ago. Bostic's comments could quell some of those worries. One key caveat, though. Bostic doesn't currently have a vote at meetings of the Federal Open Market Committee, so his current opinion is purely advisory. Still, investors chose to take his comments as a sign that the Fed remained committed to a gradual pace of hikes before rates peak later this year, near 5.5%, up from the current range of 4.50% to 4.75%.

In tech land, strong earnings from Salesforce suggested that tech's troubles could be somewhat exaggerated. Shares of the cloud pioneer surged 11.5% on the day, also helped by the company's commitment to repurchase $20 billion worth of stock. Some of the excitement also came on the heels of comments from CEO Marc Benioff who stressed the company was taking a new, more disciplined approach to its business. Eric Savitz reports:

CEO Marc Benioff said on the company’s conference call with analysts that its board has formed a “business transformation committee,” and disbanded a committee focused on mergers and acquisitions. That should please investors who think the company is too focused on growth via M&A.

Benioff's comments were reminiscent of the post-earnings thoughts from Meta Platforms CEO Mark Zuckerberg, who called 2023 the "year of efficiency." If you're a tech company, it's suddenly cool to save money.

Meanwhile, Benioff told Barron's Andy Serwer today that a slate of activist investors had helped the company boost its earnings. Check out his comments here.

The tech-heavy Nasdaq Composite rose 0.7% on the day, snapping a two-day losing streak. The Nasdaq is up 9.5% in 2023, though it's still off 29% from its November 2021 record. The Dow Jones Industrial Average gained 342 points, or 1.0%, while the S&P 500 was up 0.8%.

Bond yields continued to head higher today despite the seemingly dovish comments from the Fed's Bostic. The 2-year Treasury note settled at 4.90%, a 52-week high. The 10-year settled at 4.07%, its highest level since November.