The futures traded lower Thursday, after all the major indexes rallied, staged a huge reversal and sold off into the close after the Federal Reserve raised interest rates again, but this time only by 50 basis points. That puts the federal funds rate at 4.25% to 4.50%. The still very hawkish tone is what caused the late-day swoon as rates are now at the highest level in 15 years.
Some top Wall Street strategists are anticipating 25-basis-point hikes in both February and March in 2023, which could bring the terminal target rate to 4.75% to 5.00%, while some feel it is ultimately higher. The true rub for stock investors is how long will Fed Chair Powell keep rates at that level. Many feel it could be 2024 before any pivot to cut and lower rates.
Yields were mostly flat across the Treasury curve on Wednesday, after the increase in the federal funds rate. The spread on the two-year and 10-year note remained at levels not seen in over 40 years, as the 10-year closed at 3.50% while the two-year finished the day at 4.24%.
Brent and West Texas Intermediate crude continued to march higher after posting solid back-to-back 3% gains on Monday and Tuesday. The International Energy Agency says that oil could rally sharply in 2023, citing Russian sanctions and demand turning higher. Natural gas finished the day lower, after big gains earlier in the week, while gold closed down and Bitcoin finished the day modestly higher.
24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding fresh ideas for investors and traders alike. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. Consensus analyst target data is from Refinitiv.
These are the top analyst upgrades, downgrades and initiations seen on Thursday, December 15, 2022.
Ambarella Inc. (NASDAQ: AMBA): Stifel reiterated a Buy rating on the shares while raising its $88 target price to $100. The consensus target is $94.10. The shares closed on Wednesday at $89.35, which was up over 3% for the day.
Amgen Inc. (NASDAQ: AMGN): Goldman Sachs started coverage on the biotech giant with a Buy rating and a $303 target price. That compares with a consensus target of $265.94 and Wednesday’s closing share price of $271.13.
Archer Daniels Midland Co. (NYSE: ADM): UBS initiated coverage with a Buy rating and a $115 target price. The consensus target is $100.08. The stock closed on Wednesday at $92.74.
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