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#LINKEDIN STOCK RAMIFICATIONS MICROSOFT UPDATE#
The recent concern about the Fed is also colliding with earnings reporting season, with some of the biggest companies in the S&P 500 scheduled to update investors on the state of their businesses and their outlook for the year. The fund said the failure of the Biden administration’s $2.2 trillion social policy package and the Fed’s tighter monetary policy were among the reasons it had reduced the growth forecast for the United States. economy to grow 4 percent this year, but that would be slower than in 2021. On Tuesday, the International Monetary Fund reduced its estimate for global growth to 4.4 percent from the 4.9 percent it projected just three months ago. Disruptions are slowing output at factories, companies are struggling to find workers, and rising prices will eat into consumer demand. That’s not to say investors and the economy aren’t facing some risks. “The bond market is not willing to move decisively in one direction or another because the economy is still in pretty good shape,” said Vincent Deluard, a strategist at StoneX Group. The yield on 10-year Treasury notes, for instance, was basically unchanged on Tuesday, and had fallen only slightly in the past week to 1.78 percent. Yields have dipped in the past week, but not by much. Typically, when investors grow particularly nervous about the economy, they pile into the bond market - causing prices to rise and bond yields, which move in the opposite direction of prices, to drop. It’s telling, analysts say, that the bond market, which in many ways is more closely tied to the Fed and the economy in general, appears to be taking the current moment in stride. “This sell-off almost smacks of fears that this will lead to a recession, but the Fed hasn’t even started to tighten,” said Edward Yardeni, an economist. 3, have climbed in only five of 16 trading days this month, and the S&P 500 is now down 9.2 percent from its high. Minutes from the central bank’s December meeting, which it published early in January, also showed that the Fed had discussed moving with more urgency. Part of Wall Street’s concern is that the Fed has room to be aggressive in its fight against inflation because the Omicron variant of the coronavirus appears, by some measures, to be less severe than previous forms. They also discourage investors from bidding up risky assets like stocks. Higher rates can slow the economy, making borrowing for houses, cars and business costs more expensive. No matter, there’s no question that investors have become unsettled by the idea that interest rates will rise this year. Powell, to signal changes well in advance so as not to surprise markets. It’s a concern that belies efforts by the Fed chair, Jerome H. The worry, which several analysts see as overblown, is that the Fed will decide it is starting its inflation fight too late and move more aggressively than investors anticipate. It will provide some much-needed clarity on where the Fed officials’ heads are.” “That’s why tomorrow’s Fed meeting is important. “The market has been behaving incoherently, not knowing whether to go down because the Fed is tightening or go up because the Fed is actually taking action to rein in inflation,” said Anu Gaggar, a strategist for Commonwealth Financial Network. The central bank has already said it will soon stop buying government bonds, and investors expect it to start raising interest rates in March.īut stock investors were agonizing over what the Fed may say on Wednesday as it concludes a two-day meeting, and that has led to the big swings in prices this week.
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Investors are focused on the Fed’s next move as it focuses on slowing inflation by pulling back on its support for the economy.