Recession

US stock bulls are taking heart from a range of market signals pointing to an upbeat year for Wall Street, as equities sit on impressive gains despite worries that the Federal Reserve’s monetary policy tightening may plunge the economy into a recession. Among these are equities’ positive January performance, a "golden cross" chart pattern on the S&P 500 and more stocks making new highs rather than new lows. Such signals are far from the only indicators market participants use to make investment decisions, and they are not foolproof. Weak outlooks for corporate heavyweights such as Amazon and Microsoft and a blowout employment number that heightened expectations for Fed hawkishness injected a fresh note of uncertainty into markets on Friday, though the S&P 500 remains up 7.7 percent year-to-date. However, steady improvements in gauges of momentum and sentiment in recent weeks reinforced the view among some investors that asset prices may be heading for a more benign … [Read more...] about Wall Street Week Ahead | Signals of market regaining momentum attract investors

The Federal Open Market Committee will meet on Wednesday, Feb. 1, to determine the direction of U.S. monetary policy. What will the Fed do? Since March 2022, it has already raised the fed funds rate by 4.25 percentage points, the largest one-year increase in four decades. When it comes to speculation over the direction of the fed funds rate, the financial press is filled with musings from Fed watchers and assorted wags. That is just background “noise.” (RELATED: EJ ANTONI: Wokeness Is Slowly Hollowing Out The Fed) There is only one objective measure of where the fed funds rate is heading — in other words, the “signal,” rather than the “noise.” It’s the Chicago Mercantile Exchange FedWatch Tool , which translates the prices of trades on fed funds futures contracts (read: market prices) to put a probability on where the fed funds rate will go. As Friedrich Hayek taught us long ago in his classic 1945 article, “ The Use of Knowledge in Society ,” an article that landed him … [Read more...] about STEVE HANKE And CALEB HOFMANN: The Fed Is Asleep At The Wheel And Americans Are Feeling The Consequences

Share to Twitter Share to Linkedin Investors were on edge at the start of the week as concerns mounted about the health of the stock market rally ahead of the FOMC meeting and earnings from four tech giants. Many think that the January move higher in stocks was just a bear market rally even though the S&P 500 gained an impressive 6.18% while the Nasdaq Composite rose 10.7%. Many Wall Street strategists , who on average looking for stocks to close below current levels in 2023, think a recession is inevitable and that earnings valuations are too high. Stocks reflected the nervousness on Monday as they had the largest drop of the month with the Nasdaq 100 losing 2.1%. Apple AAPL , Inc. (AAPL) and Microsoft MSFT (MSFT) led the decline. This reassured the stock market bears as Morgan Stanley commented “We think the recent price action is more a reflection of the seasonal January effect and short covering after a tough end to December and a … [Read more...] about Tech Rally Scares Bears, Should It?