Bond markets tense up as people wonder what the Fed will do next
April Ends on a Sour Note
Stocks Have a Hard Day as Fears of Inflation Bite Again
Stocks Have a Hard Day as Fears of Inflation Bite Again
Wall Street saw yet another turbulent day as equities plummeted, with the S&P 500 closing at 4,170.22 after losing 1.6%. This was a major retreat, wiping out gains from the previous week and culminating in the largest loss of the month, 4.2%, since October of last year. Not to be left out, the Dow posted its worst result since September 2022. Globally, markets were similarly depressing, especially in Europe where investors were alarmed by an unanticipated increase in core inflation.
Bond markets tense up as people wonder what the Fed will do next
In response to the most recent wage growth statistics, yields on 10-year Treasury notes cautiously increased to 4.65%. Although these figures are positive for workers, they may indicate problems with controlling inflation, which would put further pressure on the Fed. Everyone is waiting to see what Fed Chair Jerome Powell will say at his news conference tomorrow, when the central bank meeting comes to an end. Will there be a hint of a change in interest rates, or will things remain as they are?
A Week Packed with Important Information and Profit Reports
This week is full of significant data releases and earnings announcements outside of the Fed's purview. The market is processing a mixed bag of corporate results, with tech businesses reporting strong growth rates and the financial industry displaying some heft. Still, at a respectable 3.4%, the total rate of profits growth isn't exactly causing a stir.
Defensive Stocks Emerge as Market Nerves Grow
Defensive industries like consumer staples and healthcare are rebounding amid market volatility, which is frequently an indication that investors are being cautious. JM Smucker (SJM), a business that isn't often the talk of the town but is currently drawing notice due to its consistent payout history, is a prime example. It serves as a reminder that, on occasion, less glamorous stocks might serve as safe havens during turbulent market periods.
What Comes Next?
The market is tense as April draws to a close. Given the importance of job data and the impending release of higher earnings, investors will probably closely monitor all news releases in an effort to predict the direction of the economy. As we move into the remainder of the year, it appears that the dominant tactic in these times is to be aware and careful.