Perception versus reality. A recent Harris poll, conducted on behalf of The Guardian newspaper, found that there is some confusion about the state of the American economy and U.S. stock market performance. A significant proportion of the Americans who participated think the economy and the stock market are in rough shape. Here are a few […]
Reading the economic tea leaves. Tasseography practitioners read tea leaves to forecast the future. Some economic data serve a similar purpose. Policymakers, central bankers, economists, and investors look at leading economic indicators to forecast where the economy may be headed. Classic leading indicators include: Consumer confidence. Consumer spending is the largest contributor to economic growth […]
Higher rates are doing what they’re supposed to do. Last week, Federal Reserve officials spoke about keeping the federal funds rate higher until it becomes clear that inflation will reach the Fed’s two percent target rate. While people typically don’t mind earning more interest on their saving and investment accounts, higher rates are painful for […]
What will the Federal Reserve do? Uncertainty about the direction and timing of Fed rate cuts is causing stock markets in the United States to charge and retreat. U.S. stocks rallied for five consecutive months (anticipating rate cuts early in 2024) before retreating in April after higher-than-anticipated inflation suggested the Fed might delay any rate […]
The economy appears to be slowing down. Last week, many investors were focused on economic data. The Personal Consumption report offers information about Americans’ income and spending over the previous month. It includes one of the Federal Reserve’s preferred inflation gauges, the personal consumption expenditures (PCE) price index. The March report showed: Disposable income, which […]
Investors have been recalibrating their expectations. There is a lot going on in the world that could affect the value of financial markets – wars, tensions between major powers, a strong dollar, and rising oil prices – just to name a few. Last week, it was Federal Reserve policy. The possibility that the Fed might […]
Inflation and geopolitics and earnings. Oh, my! It was a rough week for stock markets. “The S&P 500 closed 1.5% lower on Friday, while the Nasdaq Composite dipped 1.6%. Every S&P 500 sector closed lower—and just about 40 stocks in the index finished the day with gains,” reported Connor Smith of Barron’s. A trio of […]
The bull charged from October 2023 through March 2024. Last week, it took a breather. Optimistic may be the best word to describe the first quarter of 2024. From the start of the year, investors were confident that an economic soft landing in the United States was possible. The U.S. stock market reflected investors’ conviction […]
What do dieters have in common with the Federal Reserve? If you’ve ever dieted, you may be familiar with the weight-loss plateau. Many people experience steady progress. The bathroom scale moves lower week by week – until it doesn’t – and that can be discouraging. The Federal Reserve has been trying to reduce inflation, and […]