Finance Finance News Markets & Shares Federal Reserve’s dovish tilt and mega-tech earnings dominate markets this week
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Federal Reserve’s dovish tilt and mega-tech earnings dominate markets this week

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The Federal Reserve hiked rates by 75 basis points this week but hinted at less aggressive easing to come. Photo: TND/AAP
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US sharemarkets rallied to a seven-week high this week, supported by better-than-expected earnings reports from US mega-tech companies and a dovish tilt at the FOMC meeting.

The ASX200 hit its highest level in six weeks, supported by a rebound on Wall Street and strong gains in energy, resource and financial stocks.

Here are the top five things that happened in markets this week.

1. FOMC – a dovish tilt

The Federal Reserve lifted rates by 75 basis points as expected to 2.25-2.50 per cent (the neutral rate). A dovish tilt was included as the Fed said “clear” forward guidance would no longer be offered.

The removal of forward guidance allows the Fed to take the foot off the monetary policy brake into year-end should economic data continue to slow, and inflation eases.

2. Australian Q2 inflation lower than feared

Australian headline inflation printed at 6.1 per cent year on year, easing fears that inflation might print higher than the 6.2 per cent consensus forecast.

3. Mega-tech earnings mostly better than expected

The share prices of Microsoft, Tesla and Google parent Alphabet powered higher after reporting better-than-expected earnings.

Elsewhere, the share price of Facebook parent Meta was sent to the naughty corner for reporting disappointing earnings and weaker guidance.

4. Russian roulette with European gas supply continues

The supply of Russian gas to Europe resumed at just 20 per cent of capacity, amplifying the current energy crisis. In response, European Union governments agreed to ration the use of natural gas to build supplies ahead of winter.

5. Sezzle sizzles to trigger BNPL renaissance

After falling off the radar in recent months, the BNPL sector roared back to life this week as the share price of Sezzle skyrocketed 100 per cent on Wednesday.

The trigger for the rally was a strong trading update from Sezzle last week that noted a solid increase in customers and revenues.

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