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Mary Daly says more rate hikes is needed, gold price paused

Mary Daly – A succession of incidents have blighted the last year, but the repercussions of inflation are still being felt today.

While it has lessened considerably, the Federal Reserve is on track to hike interest rates again in order to address the remaining issue.

The necessity of another rate rise was also emphasized by Mary Daly, President of the San Francisco Fed.

The news

On Saturday, Mary Daly stated that the Federal Reserve should not only raise but also maintain interest rates at current levels.

She said that doing so would allow them to deal with the rising prices brought on by inflation.

“There is more work to do,” said Daly at Princeton University.

“In order to put this episode of high inflation behind us, further policy tightening, maintained for a longer time, will likely be necessary.”

“Restoring price stability is our mandate, and it is what the American people expect. So, the FOMIC remains resolute in achieving this goal.”

Mary Daly also admitted that excessive inflation and the Fed’s aggressive rate increases to bring prices down caused fear on Main Street and Wall Street.

“The responses range from fearing these actions will tip the economy into a recession to fearing they won’t be enough to get the job done.”

With the announcement of new economic data, the concern drove dramatic market fluctuations, as uncertainty motivates investors to seek rapid solutions.

Nonetheless, Daly believes that accomplishing the stated target will take time and “a broader view.”

Additionally, Mary Daly stated that the Fed’s current tightening strategy was (and continues to be) reasonable given the volume and duration of high inflation readings.

Daly also challenges the disinflationary trend, citing substantial inflation in the goods, housing, and associated sectors, as well as robust economic indicators.

While Mary Daly does not presently vote on Fed policy, she is a member of the Federal Open Market Committee and attends policy meetings.

Federal Reserve warnings

The Federal Reserve issued similar warnings a week before Mary Daly’s address.

Minneapolis Federal Reserve President Neel Kashkari stated last Wednesday that he is open to the potential of a higher interest rate rise during the Fed’s March policy meeting.

“Whether it’s 25 or 50 basis points,” said Kashkari.

Similarly, Atlanta Fed President Raphael Bostic shared similar comments, stating that the Fed’s policy rate should be raised by half a percentage point at the next meeting.

A day later, Fed Governor Christopher cautioned that interest rates might rise faster than expected.

He alluded to a string of better-than-expected economic figures.

Read also: Stocks dropped in 2nd month of the year

Interest rate progress

The Federal Reserve has done a lot in the last year to keep inflation under control.

It increased its goal range from nearly zero to 4.5% to 4.75%.

They lowered their raises to a quarter of a percentage point in February, after dropping half a percentage point in December.

Inflation had reached a four-decade high in 2022, but it began to recede in the last quarter.

Yet, January inflation figures revealed that the rate of price rises was gradually increasing again.

Gold price

Gold prices have paused as a result of the several warnings issued in recent weeks.

Prices fell from an early two-and-a-half-week high on Monday, as traders awaited US Federal Reserve Chair Jerome Powell’s judgment for signals on future rate rises.

Spot gold had earlier reached a high of $1,858.19 per ounce on February 15, but it is presently down 0.3% at $1,849.33 per ounce.

Meanwhile, gold futures in the United States climbed modestly, reaching $1,855.10.

Also, the dollar index rose 0.1%, making greenback-priced bullion more costly for foreign purchasers.

Awaiting testimony

Many are anticipating Powell’s testimony to Congress on Tuesday and Wednesday, followed by the February jobs report on Friday.

“Currently, gold is in a wait-and-see mode,” said UBS analyst Giovanni Staunovo.

“There’s unlikely to be a change of script from Powell, reiterating the need for further rate hikes to bring inflation under control.”

While gold is often used as a hedge against inflation, increasing interest rates may reduce demand for zero-yielding metal.

Mary Daly discussed the potential of interest rates rising (and remaining there) if data continues to be hotter than expected on Saturday.

According to Reuters technical expert Wang Tao, current gold might continue advances into a range of $1,867 to $1,876 per ounce due to resistance breaching at $1,853.

Image source: CNN

The stock market gets a good start in October as the market rallies

Image source: Bankrate

A new month often brings new opportunities for businesses, and October started well with positive news for the stock market.

Despite growing concerns about the financial health of European banking giant Credit Suisse and weak economic data, the stock market rallied early in the fourth quarter.


The Dow jumped to 765 points (2.7%), with the biggest gain last seen in mid-July.

Meanwhile, the Nasdaq and the S&P 500 gained 2.3% and 2.6%, respectively.

The third quarter and stocks ended on the last Friday of September, with stocks reaching a low milestone.

However, all 30 Dow stocks but one closed higher on Monday, a sign of market volatility.

Johnson & Johnson (JNJ) was the only title that didn’t reach the same height as the others.

Investor concerns

Persistent inflation continues to worry investors amid aggressive rate hikes by the US Federal Reserve.

Many fear that attempts to rein in price increases could push the economy into recession.

During 2022, stocks fell dramatically.

The CNN Business Fear & Greed Index, CNN’s way of measuring stock market movements, continues to show extreme levels of fear.

However, Monday’s market rally could signal that perverse bad news is good news.

Meanwhile, fears of escalating tensions at Credit Suisse (CS) could prompt the Fed to ease aggressive rate hikes.

Bond market investors are relying on the stress.

Treasury bonds and inflation

Benchmark 10-year government bond yields have fallen in recent days.

Although it rose briefly above 4% last week, it fell to 3.66% on Monday.

Inflation also remains a problem.

However, if the Fed and other central banks are concerned that a troubled European bank could lead to another financial contagion, now is not the time to raise interest rates by an historic amount.

Last week, traders estimated there was a more than 70% chance that the Fed would raise interest rates by three-quarters of a percentage point for the fourth consecutive session at the November 2 stock market meetings.

Today, the probability of a rate hike of this magnitude has fallen to 50%, with the probability of a more modest hike increasing by half a point.

The latest US manufacturing data could also prompt the Fed to reconsider how it should raise interest rates.

Economic progress

The economic nonprofit, the Institute for Supply Management, reported that the influential manufacturing index fell in August.

The index also fell below Wall Street forecasts.

Both can be seen as a sign that Fed rate hikes to slow the economy and reduce inflation are having the desired effect.

Jim Baird, chief investment officer of Plante Moran Financial Advisors, released a report on Monday stating:

“The economy is slowing – a reality that is increasingly apparent in the manufacturing sector.”

“The good news is that there are welcome signs that prices are stabilizing.”

The price of oil and other stocks

A hike in oil prices on Monday stimulated energy supplies, but also brought bad news to consumers.

Chevron (CVX) was the highest share in the Dow, while the energy sector was the best in the S&P 500.

Oil stocks rose after reports suggested that the OPEC+ blockade on oil producers is considering a cut in production.

The cut should mitigate the recent steep drop in crude oil prices.

Investors will also be relieved that the British pound, which has recently fallen to record lows against the US dollar, has recovered after the new UK government abandoned plans to cut taxes on wealthier Brits.

However, a stronger pound could add to fears of higher bond yields and higher borrowing costs in the UK.

Meanwhile, Tesla (TSLA) was among the stocks that did not participate in Monday’s rally.

The company’s stock dropped nearly 9%, putting it among the worst performers in the S&P 500.

Disappointing delivery and production figures for the third quarter were also reported over the weekend.

In contrast, Tesla’s competitor, GM (GM), rebounded after posting positive sales in the third quarter.


Stocks kick off October with a huge rally

Several US Stocks Decline Again, Major Banks to Kick Off Earnings Season

Several American stocks decreased on Monday as the Dow Jones share decreased by 0.5%, the S&P 500 1.2%, and the Nasdaq Composite 2.3%. A day later, the shares finished lower, prompting investors to prepare for the most significant inflation in four decades.

Market leader

The inflation report threw a shadow on the economic calendar. As a result, investors are currently hesitating to open new positions, even if the White House rejected the report and explained that it was obsolete.

“The overarching driver of trade today is the CPI report tomorrow and investors’ reluctance to get out directionally one way or the other in advance of it,” said Janney Montgomery Scott chief investment March Luschini. 

Operators also remain wary of corporate earnings prospects amid signs of slowing global economic growth. However, the drop in commodity prices has given hope that the Federal Reserve will cut interest rates again next year.

“There’s been some talk of peak inflation in the US due – among other reasons – to a fall in some agriculture food prices,” said City Index financial markets analyst Fawad Razaqzada. “After all, it was the soaring prices of wheat, corn, and other soft commodities, as well as energy, that have boosted inflation so much over the past year or so.”

“With these prices coming down a little, this is clearly some good news – and some light at the end of the tunnel,” Razaqzada added.

Despite his optimism, Fawad Razaqzada believes the decline in commodity prices won’t be reflected in the June consumer price index. “So, just like May, there is a risk that inflation could overshoot again. If so, this will likely trigger fresh gains for the dollar.”

Investors have expressed concern about the currency’s impact on corporate earnings as the dollar’s value skyrockets.

“Investors are thinking about what it means in terms of tightening financial conditions,” said Luschini. “Plus the fact that it will work to be counterproductive to earnings.”

The dollar rose higher than its major rivals, but pulled back from a two-decade high for the ICE US Dollar DXY Index on Tuesday after the EURUSD approached parity with the US currency for the first time in over 20 years.

Major banks kick off the earnings season

According to FactSet, analysts expect an average 4.3% increase for companies in the S&P 500, the weakest since late 2020. Analysts predicted 5.9% growth in April, but the difference reflects growing concerns that inflation and rising borrowing costs imposed by central banks are pushing down profit margins.

Turning to economic data, the National Federation of Independent Business said Tuesday that the small business optimism index took a hit, last seen in the early months of the 2020 pandemic, showing that the index has collapsed in five of the past six months.

A survey found that 34% of respondents cite inflation as their top concern, indicating that inflation continues to hurt small businesses.

Meanwhile, the US 10-year yield BX: TMUBMUSD10Y fell 2.958% as traders sought security from public debt. However, the rally in Treasuries caused the spread between 2-year and 10-year bonds to narrow to -8.5 basis points, the deepest inversion since early 2007.

Stock market settles into a steady pace after the worst day in US stocks

Image source: PBS

At the beginning of Wednesday, markets finally stabilized after US equities recorded their worst day, the last time was in June 2020.

The good news overshadowed a precedent which revealed that inflation was higher than expected in August.

European stocks

Equities in Europe have shown mixed results in several countries.

In Germany, the DAX (DAX) fell 0.2% at the start of trading, while the French CAC 40 (CAC40) remained flat.

Meanwhile, London’s FTSE 100 (UKX) fell 0.7%.

The Italian benchmark index showed some positive signs, rising by 0.7%.

US stocks

While European equities showed a mixed performance, US stock futures showed improvements as they were slightly higher.

“Equity futures suggest that the rout stops here,” Robert Carnell, regional head of Asia-Pacific research at ING, wrote in a report.

U.S. stocks plunged Tuesday into what was the worst day since June 11, 2020, after August inflation data surprised investors.

The US consumer price index, which includes major goods and services, rose 0.1% in July. The rise contradicted economists’ forecasts of a 0.1% decline.

While annual inflation fell for the second month in a row, it remained stubbornly high, with prices rising 8.3% year-on-year.

The stocks

  • The Dow (Indu) was down 3.9%
  • S&P 500 (INX) fell 4.3%
  • Nasdaq Composite (COMP) plunged 5.2%

Impact of inflation on the Asian market

The move in the US stock market gave investors a sigh of relief.

They were initially worried that higher-than-expected inflation would prompt the US Federal Reserve to aggressively raise interest rates.

The decision would have caused serious damage to the US economy. Carnell also wrote that daily US inflation data overwhelmed Asian markets.

She noted that core inflation in the US, which eliminates volatile categories like food and gas, hit 6.3% last month.

Monthly earnings of 0.6% were double what economists expected.

Asian stocks

  • Japan’s Nikkei 225 slid 2.8%
  • South Korea’s Kospi lost 1.6%
  • Shanghai Composite (SHCOMP) Index slid 0.8%
  • Hong Kong’s Hang Seng fell 2.5%

Other notes

Consumers in the United States are struggling to adjust to rising prices as markets have been slashed on almost everything from food to school supplies.

Meanwhile, annual UK inflation fell to 9.9%, reflecting the decline in gasoline prices. In the previous month, however, it had risen 0.5%.

Additionally, the UK’s annual CPI rose 6.3% thanks to the removal of energy and food costs.


Markets steady after worst day for US stocks since June 2020

Mortgage rates still on 5-week trajectory

Mortgage Despite the new year, the fight against inflation continues due to it being stubbornly unpredictable.

Mortgage rates fell below 7% for the seventh week in a row, although the Federal Reserve said rates may increase higher.

Fixed-rate average

According to Freddie Mac data issued on Thursday, the 30-year fixed-rate mortgage averaged 6.73% in the week ending March 9.

A week ago, the fixed-rate mortgage was at 6.65%.

Last year, the 30-year fixed rate was 3.85%.

It soared around 7.08% in November before declining.

Despite the positive indicators, interest rates started to increase again in February.

In the previous month, the fixed-rate mortgage has climbed by half a percentage point.

The solid economic data indicates that the Federal Reserve still has work to do in combating inflation and will most likely continue to raise the benchmark lending rate.

“Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” noted Sam Khater, a chief economist from Freddie Mac.

“Overall, consumers are spending in sectors that are not interest rate-sensitive, such as travel and dining out.”

“However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”

The average mortgage rate is derived by Freddie Mac using mortgage applications received from scores of lenders across the United States.

It is only available to individuals with excellent credit and a 20% down payment.

Rate hikes confirmed to continue

Inflation looked to be reducing as 2023 approached.

So far, strong employment growth and a rising Consumer Price Index revealed that inflation was still present and continuously high.

On Tuesday, Federal Reserve Chairman Jerome Powell testified before Congress, suggesting that the central bank will most likely raise interest rates more aggressively than originally projected.

Jiayi Xu, an economist at, stated:

“While last month Fed officials said that a smaller increase in the federal funds rate would help create a soft landing for the economy, Powell’s testimony on Tuesday made it clear that the central bank is prepared to return to a faster pace of rate increases if the incoming February economic indicators remain strong.”

She feels that the outcome shows that investors were not fully prepared since they are anxious about the Federal Reserve’s upcoming activities.

On March 21-March 22, the Fed will convene another rate-setting meeting, with another half-point rate rise probable.

Read also: Bank stocks investment spikes from recession fears

“Uncertainty about how high rates will go and how long they will remain elevated makes it challenging for investors to make well-informed decisions,” said Xu.

“Therefore, it’s crucial to keep a close eye on the latest developments from the Federal Reserve.”

Although the Fed does not set mortgage interest rates directly, its actions have an influence on them.

Mortgage rates are frequently associated with 10-year US Treasury bond yields.

It reacts to the Fed’s activity, what it really does, and how investors react to it.

Mortgage rates climb when Treasury yields rise, while mortgage rates fall when yields fall.

Housing market

Rising mortgage rates have impacted the spring selling season.

Mortgage applications climbed modestly last week, following three weeks of reductions, according to the Mortgage Bankers Association.

As a result, activity decreased.

Bob Broeksmit, MBA’s president and CEO, stated:

“Even with this jump in activity, both purchase and refinance applications remain well below year-ago levels when rates were much lower.”

“The recent increase in mortgage rates, right at the start of the busy spring buying season, could cause prospective buyers to delay decisions until rates moderate.”

Homebuyer confidence fell to a new low in February, according to a Fannie Mae survey.

Mood dipped after three months of improvement, pushing the indicator closer to its all-time survey low from October.

The greatest substantial drops were associated with employment security and home-selling situations.

“While the current housing market may not look promising for sellers due to factors such as an increasing number of unsold homes, longer time on market, and decelerating price growth driven by high mortgage rates, there are still opportunities to be found,” said Xu.

For example, she said that recent sales numbers show that the percentage of first-time homebuyers is higher than previous year.

“As a result, sellers with starter homes may see robust demand and retain some bargaining power.”

Additionally, Xu remarked that the long-term presence of hybrid working models allows greater options for homeowners when picking where to stay.

Buyers will relocate away from work if they do not commute to work every day, rather than contending for a house in congested, central districts.

“This trend could make homes with easy access to public transportation systems more attractive to home buyers, which, in turn, enhances bargaining power for the sellers,” said Xu.

She also remarked that sellers who are also buyers may benefit from their record-high equity, even if they have to adjust their expectations to lower asking prices.

Image source: Money

Bank stocks investment spikes from recession fears

Bank stocks According to analysts, major economies may well stall or suffer a recession.

As a result, in 2023, investors are breaking with tradition and flocking to large bank stocks.


From January and late February, the Stoxx Europe 600 Banks index, which comprises 42 major European banks, surged by 21%.

It surpassed its bigger benchmark index, the Euro Stoxx 600, to set a five-year high.

Yet, the KBW Bank, which monitors 24 of the top American banks, gained by 4% in 2023, outperforming the S&P 500 by a wide margin.

Since their lows in October, the two bank-specific indexes have climbed.

The economy

So far, the economic condition is less advantageous.

Compared to last year, the main economies in the United States and the European Union are predicted to grow slightly.

However, output in the United Kingdom is expected to decline.

Former Treasury Secretary Lawrence Summers feels that a quick recession is dangerous for the United States at some point.

But, as a result of widespread economic weakness and unsustainable inflation, central banks were forced to raise interest rates.

In any event, it has helped banks by allowing them to generate bigger profits on consumer and business loans as savers deposit more money into savings accounts.

While rate hikes have kept major banks’ stocks steady, fund managers and analysts believe investor and analyst confidence in their ability to weather economic storms since the financial crisis of 2008 has also played a role.

“Banks are, generally speaking, much stronger, more resilient, more capable to [withstand] a recession than in the past,” said Roberto Frazzitta, the global head of banking at Bain & Company.

Interest rate increases

When major countries’ interest rates climbed last year, governments launched steps to curb growing inflation.

The significant hikes followed a period of low borrowing costs that began in 2008.

The financial crisis wreaked havoc on the economy, prompting central banks to lower interest rates to historic lows in order to spur consumption and investment.

For more than a decade, central banks have done nothing.

In an environment where lower interest rates suggest fewer lender earnings, investors seldom bet on banks.

According to Capital Economics’ senior markets economist, Thomas Matthews:

“[The] post-crisis period of very low interest rates was seen as very bad for bank profitability, it squeezed their margins.”

But, the rate rise cycle starting in 2022, as well as a few signs of weakening, shifted investors’ expectations.

On Tuesday, Fed Chair Jerome Powell warned that interest rates may rise quicker than expected.

Read also: Mary Daly says more rate hikes is needed, gold price paused

Returning investors

Investors have been attracted to the higher possibility for shareholder profits.

The average dividend yield for European bank equities is currently 7%, according to Ciaran Callaghan, Amundi’s director of European market research.

According to Refinitiv data, the S&P 500 dividend yield is at 2.1%, while the Euro Stoxx 600 yield is 3.3%.

Additionally, European bank stocks have surged in the recent six months.

Capital Economics outperformed its American rivals, according to Thomas Matthews, because interest rates in countries that use euros are closer to zero than in the US, meaning that investors have more to gain from increasing rates.

He also stated that it may be ascribed to Europe’s unexpected turn of events.

Wholesale natural gas prices in the region hit a record high in August of last year, but have since returned to pre-Ukraine war levels.

“Only a few months ago, people were talking about a very deep recession in Europe compared to the US,” said Matthrew.

“As those worries have unwound, European banks have done particularly well.”

Structural changes

The European economy is still struggling at the moment.

As economic activity slows, bank stocks are harder to hit since bank revenues are related to borrowers’ ability to repay loans and fulfill consumers’ and businesses’ appetite for additional credit.

Banks, on the other hand, are better positioned than they were in 2008 to withstand loan defaults.

Authorities proactively established legislation requiring institutions to keep a strong capital buffer against possible losses during the global financial crisis.

Lenders must also have enough cash (or quickly convertible assets) to pay back depositors and other creditors.

Banks have undergone structural changes in the recent decade, according to Luc Plouvier, senior portfolio manager at Dutch asset management firm Van Lanschot Kempen.

“A lot of the regulation that’s been put in place [has] forced these banks to be more liquid, to have much more [of a] capital buffer, to take less risk,” he noted.

Image source: Stock Market Walk

Stocks dropped in 2nd month of the year

Stock While estimates predicted a prosperous year, many people anticipated last year’s economic problems to have been remedied by now.

But, things did not appear to be going as swiftly as predicted by the end of February.

The stock market has been volatile all month, with shares falling on the last day.

The news

Wall Street reported on Tuesday that US stocks had a tough February.

The S&P 500 dropped 0.3%, while the Dow Jones Industrial Average dropped 0.7%.

In the meantime, the Nasdaq Composite lost 0.1%.

On Tuesday afternoon, the 10-year US Treasury note rate increased to 3.92%.

In the United States, WTI crude oil has surged to more than $76.94 per barrel.

Also, the dollar index rate rose to $104.92.


After its worst week since 2023, Wall Street had a little rebound on Monday, with markets finishing modestly higher.

After a great start to the year, all three indexes ended the month in the red.

According to economic data, retail inventories excluding autos increased by 0.3% on Tuesday.

Bloomberg forecasts a 0.1% growth.

Wholesale inventories, on the other hand, declined by 0.4%, falling short of the 0.1% consensus forecast.

Consumer confidence

In February, American customers were unsatisfied with the economy, according to the Confidence Board.

The Consumer Confidence Index declined from 106.0 to 102.9, falling short of the 108.5 expected.

The February Chicago PMI fell from 44.3 to 42.6, falling short of expectations.

Nationwide’s senior economist, Ben Ayer, released the following statement:

“Consumers and businesses are looking for ways to reduce expenses in anticipation of much weaker activity over the rest of the year.”

“The drop in consumer confidence in February aligns with weaker business confidence readings as the Fed’s sharp increase in interest rates start to bite.”

The house market

House prices fell 0.5% in December, according to the S&P CoreLogic Case-Shiller Index.

Notwithstanding this, housing prices rose 4.6% year on year.

Apart from being high, costs were lower than the 4.8% projected by analysts.

Read also: Fused Media: A Better Way to Grow Your Contracting Business


Inflation remains despite improving economic conditions.

Federal Reserve Governor Philip Jefferson opposed suggestions to enhance the Fed’s 2% inflation target on Monday.

He expressed his dissatisfaction with the prospect of decreasing inflation.


According to sources, investors will continue to focus on the retail sector this week.

Target’s earnings on Tuesday above analysts’ expectations, as consumer spending turns away from discretionary products.

Same-store sales increased by 0.7%, above the forecasted loss of 1.74%.

The stock market advanced about 1% on Tuesday.


According to Bespoke Investment Group data, 420 stocks posted earnings in the preceding week.

A number of firms who have cut their guidance have more than tripled the percentage of firms that have boosted their advice, signaling that small-cap firms reporting late in the season would face additional challenges.

Zoom stock increased after the business posted better-than-expected fourth-quarter earnings.

Its earnings per share of $1.22 exceeded the predicted 80 cents, and its revenue was $1.12 billion.

The shares of Occidental Petroleum plummeted on Tuesday after the oil and gas firm disclosed fourth-quarter profits that fell short of Wall Street expectations.

Workday, a human-resources software company, saw its stock rise not just grow but also exceed expectations.

They reported $1.65 billion in sales, up from $1.63 billion expected, a 20% rise year over year.

The shares of AMC Entertainment Holdings, Inc. was among those that declined.

The stock fell sharply on Tuesday after a Delaware court scheduled a hearing on April 27.

The postponement will very definitely cause the conversion date of APE convertible units into common stock to be delayed.

Tesla’s stock dropped almost 1% after Mexico’s president revealed that the company would build a new facility in Monterrey, Mexico.

According to the Mexican president, more details would be given on Tesla’s investor day, with the facility expected to be massive.

The shares of Coinbase increased as fears about crypto regulation subsided.

The SEC subpoenaed the business on Monday as part of its continuing investigation into, among other things, cryptocurrency listings, digital asset custody, and platform operations.

The shares of Norwegian Cruise Line fell after the firm revealed larger-than-expected losses.

The firm expected a poor year-end performance due to increased gasoline and labor costs.

The shares of Bank of Nova Scotia declined as earnings from its capital markets business fell due to a slowdown in its investment banking division.

Image source: SoFi

The Federal Reserve impact on stock market; Thursday market updates

Image source: Investopedia

The Federal Reserve: After more than a century of existence, the Federal Reserve has long established itself as the dominating factor in the stock market.

Large-scale asset purchases and forward guidance were two unconventional policy measures used by the central bank in the 2000s that contributed to the organization’s rise in reputation.

The policy tools

The Federal Reserve’s emergency purchases of government debt and mortgage-backed securities are large-scale asset acquisitions.

On the other hand, forward guidance describes the Federal Reserve’s public statements regarding the direction its monetary policies will follow.

The guidance also includes the estimate for the federal funds interest rate goal before a policy change.

Inflation and economic landscape

In 2022, central bankers cautioned the people to prepare for more challenging economic times as it fights inflation.

The attempts, according to experts, contributed to the S&P 500’s prices declining for several months.

Former Federal Reserve economist and Notre Dame University economics professor Jeffrey Campbell said the following:

“I think they know they gambled and lost, and that they have to do something serious in order to get inflation back under control.”

“I fear that they took a gamble that inflation wasn’t too real a thing at the beginning of 2021.”

In 2022, the Federal Reserve raised interest rates seven times in response to stronger inflation than predicted.

The effects of higher rates may be felt by publicly traded corporations, particularly growth shares in the technology industry.

Cautious warnings

Since April 2022, the Federal Reserve’s asset portfolio has decreased by more than $336 billion.

According to experts, the overall cumulative impact of the economic tightening remains uncertain.

Thus, many people on Wall Street are hopeful that the central bank will rethink its strategy and cut interest rates.

At the same time, many financial experts are advising caution.

Victoria Green, founding partner and chief investment officer of G Squared Wealth Management, stated the following:

“If you have somebody that has a thumb on the scale or has a decided advantage about what’s going to happen, whether we think good things or bad things are going to happen, it’s best not to fight that policy.”

Experts claim that central bank policy is just one piece of the puzzle.

Investor sentiment and black swan events also greatly influence the market’s trajectory.

John Weinberg, a retired policy advisor from the research department of the Federal Reserve Bank of Richmond, stated:

“Sure, don’t fight the Fed, but… don’t believe too much that the Fed is all powerful.”

Stock movement

On Thursday, during the lunch hour of trading, several companies generated headlines with their stock movement.


Airlines’ shares fell on Thursday due to the announcement of multiple flight cancellations.

Due to a harsh winter storm, the US American and United stocks fell 3.6% and 1.9%, respectively.

Both Delta and Southwest had drops of 2% and 3%.

AMC Entertainment

The company’s shares dropped 7.4% after it proposed a reverse stock split to lower its debt and announced a new $110 million capital raise.

Meanwhile, shares of its preferred stock increased by more than 75%.

Read also: Rent on the rise, but it’s moving at a steady pace


Following the most recent quarter’s earnings, the vehicle retailer saw a 3.7% decline in the value of its stock, and revenue missed Wall Street projections.

CarMax produced 24 cents per share on $6.51 billion in revenue as opposed to the analysts’ forecast of 70 cents per share on $7.29 billion in revenue.

Micron Technology

The semiconductor company’s poor quarterly earnings and revenue caused the stock to drop by 3.4%.

The revenue was attributed to the decrease in demand, which is expected to remain through 2023.

Also announced by Micron was a 10% staff reduction for the following year.

Other semiconductor stocks experienced a 7% and 5.6% decline, respectively, for Advanced Micro Devices and Nvidia.

Marvell Technology lost more than 4%.


After reporting earnings and revenue that surpassed expectations for the second quarter of fiscal 2023, MillerKnoll saw a gain of more than 14%.

The company claims that it reduced annualized expenses by $30 to $35 million.

Although slightly in the third quarter, these savings would be realized in the fourth quarter.

Mirati Therapeutics

Shares of the pharmaceutical company increased by more than 5% after the Food and Drug Administration named its colorectal cancer treatment a “breakthrough therapy.”


On Thursday, the company’s stock fell by roughly 9%.

According to the Tesla website, a $7,500 discount was offered on the Model 3 and Model Y cars that were delivered in the US by year’s end.

Additionally, the models include a free supercharge good for 10,000 miles.


TuSimple announced it would let go of 25% of its workforce after the stock dropped by more than 11%.

The decision would impact over 350 employees at the self-driving truck startup.

Tyson Foods

The company’s shares ended unchanged after The Wall Street Journal reported that the meat and poultry manufacturer plans to dismiss hundreds of employees next year.

Tyson Foods’ corporate offices will merge next year.

Read also: Heavy Recession One of the Solutions to Combat Inflation, According to Analysts

Under Armour

On Thursday, shares of the athlete apparel company dropped by more than 2.3%.

Additionally, the company revealed that Stephanie Linnartz of Marriott International would become CEO the following year.


How the Federal Reserve affected 2022’s stock market

Stocks making the biggest moves midday: AMC Entertainment, Tesla, Micron, Under Armour and more

Stock market in October show more positivity but isn’t completely in the clear

The stock market is known to experience significant declines in October through the years, including 1929, 1987, and 2008.

However, the stock market in 2022 managed to avoid similar problems.

Wall Street investors have nothing to fear as the month closes.

The market continued its October hot streak on Monday and enjoyed another strong rally.


The Dow closed over 420 points (1.3%) on Monday.

Additionally, the Dow Jones gained almost 10% in October, recovering from the sharp falls in August and September.

Blue chip industrials and other giants of the US economy are still down 13% in 2022, including:

  • Apple (AAPL)
  • Microsoft (MSFT)
  • Coca-Cola (KO)
  • McDonald’s (MCD)
  • Disney (DIS)

Read also: The stock market gets a good start in October as the market rallies

Federal Reserve

The market rebounded this month, hoping the Federal Reserve would break its aggressive rate hikes to curb inflation.

Strong rate hikes are expected at the next Fed meetings on November 2 and December.

However, some people hope the Fed can pause the hikes next year.

Solid third-quarter earnings are also helping to strengthen stocks.

The bear market

The S&P 500 was up 1.2% on Monday, while the Nasdaq gained 0.9%.

The two indices show decent gains for October as well.

The Nasdaq is up by more than 3.5%, while the S&P 500 is up by nearly 6%.

The S&P 500 and Nasdaq are still down more than 20% each this year, which means they are in a bear market.

The Nasdaq was in the green on Monday, putting it in a favorable position.

Read also: Stock market settles into a steady pace after the worst day in US stocks

The Chinese market and other stocks

Several top Chinese tech stocks traded in the United States fell because of fears of a crackdown in China.

The crackdown comes from news that Xi Jinping will serve a third term as China’s leader.

Meanwhile, the e-commerce company Pinduoduo (PDD) lost more than 25%.

Electric car makers and significant Chinese tech stocks posted double-digit percentage losses, including:

  • Nio (NIO)
  • Xpev
  • Li Auto
  • Alibaba (BABA)
  • Baidu (BIDU)
  • Tencent (TCEHY)

Tesla shares fell 1.5%, while Starbucks fell 5.5%.

The fast food giant Yum! Brands (YUM) is down 2%, while Yum China (YUMC) fell 14%.

Yum China distributes several food brands in China, such as:

  • KFC
  • Pizza Hut
  • Taco Bell

Casino owners with properties in Macau, Wynn Resorts and (WYNN) and Las Vegas Sands (LVS) also fell.

Image source: Market Watch


October surprise? Stocks continue to sizzle this month

Stock Future Takes a Dip While Wall Street’s Momentum Shows Irregularities

The U.S equity futures struggled in pre-market trading Tuesday despite seeing a bounce last week that snapped the longest losing streak for stocks in over two decades, when it was just 0.3%. Futures tied to major indices like Nasdaq dropped 120 points or about 0.4%, which is not surprising given their recent performance over the past few months due to worries around global economic growth .

The recent upward trend in all three indexes has been positive, with weekly gains over 6%. This is making better progress after seven consecutive losing weeks for S&P 500 and Nasdaq as well eight torturous days for the Dow.

Crude oil futures charged higher on reports that Chinese authorities plan to end a two-month COVID lockdown in Shanghai and EU leaders agreed to stop purchases of crude from Russia. The WTI price rose 3.6% while Brent increased 3.7%.

Wall Street is getting a boost from positive earnings reports. The recent economic data has also helped alleviate concerns over inflation. Stocks are down for the year, but some strategists say they may not have reached rock bottom just yet.

“Last week’s strength will prove to be another bear market rally in the end,” said Morgan Stanley CIO Michael Wilson in a note.

Stocks have had a month filled with volatility as investors wait to see if inflation will continue its decades-long rise and what effect higher interest rates might have on the economy, especially with the interest rates pointing to a possible recession.

“The primary rationale ascribed to this particular rally beyond just an oversold bounce is that the Fed may be contemplating a pause in September,” Wilson said. He also added that “inflation remains too high for the Fed’s liking and so whatever pivot investors might be hoping for will be too immaterial to change the downtrend in equity prices.”

Investors are closely monitoring a plethora of key employment data this week, including the May jobs report due Friday.