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Stocks hit session lows as Fed minutes signal half-point rate hike ‘appropriate’ at future meetings

April 6, 2022

Hood River Capital Management portfolio manager Brian Smoluch provides his best energy plays on ‘The Claman Countdown.’

US stocks fell to session lows Wednesday after digesting the minutes of the Federal Reserve’s March meeting, in which policymakers signaled that surging inflation and an incredibly tight labor market could warrant a half-point interest rate hike at future meetings.

The Dow Jones Industrial Average is down around 150 points, or 0.44%, while the S&P 500 and Nasdaq Composite slipped 1% and 2.14%, respectively.

Ticker	Security	Last	Exchange	Change %
I: DJI	DOW JONES AVERAGES	34577.49	-63.69	-0.18%
SP500	S&P500	4497	-28.12	-0.62%
I:COMP	NASDAQ COMPOSITE INDEX	13982.754836	-221.41	-1.56%

The minutes also reaffirmed Fed Governor Lael Brainard’s remarks on Tuesday that the central bank could start to reduce the balance sheet as early as May. Following her comments, the 10-year Treasury yield has spiked above 2.6%, its highest level since March 2019.

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Oil has dipped below the $100 per barrel mark after the Energy Information Administration reported an unexpected rise in crude inventories by 2.4 million barrels. Analysts polled by Refinitiv were expecting a 2.05 million-barrel drop.

Ticker	Security	Last	Exchange	Change %
BP	BP PLC	29.67	-0.02	-0.07%
CLC	CHEVRON CORP.	165.31	+1.91	+1.17%
NDV	DEVON ENERGY CORP.	58.63	+0.13	+0.22%
XOM	EXXON MOBIL CORP.	83.95	+1.17	+1.41%
PXD	PIONEER NATURAL RESOURCES CO.	242.71	-1.63	-0.67%
SHEL	SHELL PLC	55.25	+0.34	+0.62%

The report comes as executives from BP America, Chevron, Devon Energy, ExxonMobil, Pioneer Natural Resources and Shell USA are testifying before the House Energy and Commerce Committee on high gas prices. The national average gas price is $4.16 per gallon as of Wednesday, according to AAA.

RUSSIA INVADES UKRAINE: LIVE UPDATES

Also on Wednesday, the White House announced additional sanctions against Russia. Western governments will ban new investment in Russia following evidence that its soldiers deliberately killed civilians in Ukraine. The US Treasury said President Vladimir Putin’s government will be blocked from paying debts with dollars from American financial institutions, potentially increasing the risk of a default.

Russian President Vladimir Putin attends a meeting with top officials on support to aviation industry in Russia amid western sanctions vis videoconference at the Novo-Ogaryovo residence outside Moscow, Russia, Thursday, March 31, 2022. (Mikhail Klime (AP / AP Pictures)

Treasury Secretary Janet Yellen has warned of major consequences for the global economy as a result of the Russian-Ukraine war, including severe disruptions to the global flow of food and energy.

“Russia’s actions represent an unacceptable affront to the rules-based, global order, and will have enormous economic repercussions in Ukraine and beyond,” Yellen said in prepared remarks during her annual testimony before the House Financial Services Committee on Wednesday.

OIL PRICES TRADE CAUTIOUSLY AHEAD OF NEW SANCTIONS ON RUSSIA

In stocks, Tilray surged as high as 9% after reporting an unexpected profit in its latest quarter despite revenue coming in below Wall Street expectations. The cannabis producer has announced an exclusive deal with supermarket chain Whole Foods to sell hemp powers produced by its Manitoba Harvest subsidiary.

Ticker	Security	Last	Exchange	Change %
TLRY	TILRAY BRANDS INC.	7.50	+0.47	+6.76%

Simply Good Foods is up more than 3% after the nutritional foods and snacks maker reported better-than-expected profit and revenue for its latest quarter and raised its sales forecast for the current year.

Ticker	Security	Last	Exchange	Change %
SMPL	THE SIMPLY GOOD FOODS CO.	39.94	+1.54	+4.01%

Meanwhile, Twitter shares have slipped after Tesla CEO Elon Musk, the social media platform’s largest shareholder, updated an SEC filing disclosing his 9.2% stake to show that it is not passive. Twitter stock has rallied over the past two days on the initial news of the stake and Musk being given a board seat at the social media platform.

Ticker	Security	Last	Exchange	Change %
TWTR	TWITTER INC.	51.31	+0.33	+0.65%

Spirit Airlines is down slightly after the airline said it will consider Jet Blue’s new $3.6 billion cash takeover offer. JetBlue’s proposal comes after Spirit agreed to be bought by Frontier Airlines for $2.9 billion. JetBlue is down more than 8% and Frontier is trading flat.

Ticker	Security	Last	Exchange	Change %
SAVE	SPIRIT AIRLINES INC.	26.24	-0.69	-2.56%
JBLU	JETBLUE AIRWAYS CORP.	12.64	-1.00	-7.33%
ULCC	FRONTIER GROUP HOLDINGS	10.83	-1.09	-9.14%

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In Asia, the Nikkei 225 in Tokyo sank 1.58%, the Hang Seng in Hong Kong fell 1.8% and China’s Shanghai Composite Index was little changed. In Europe, the Stoxx 50 is down 2.3%, the CAC40 is down 2.2% and the DAX is down 1.8%.

The Associated Press contributed to this report.