Money Sense

[Anonymous]

The Federal Reserve is locked in a battle with inflation, and the effects of its policies are increasing the odds of a recession.



Economists use an aircraft analogy to describe what the U.S. is facing, arguing the Fed is attempting to slowly power down the economy's engine, thereby reducing inflation and ensuring a "soft landing."



Of course, with inflation and the war in Ukraine raging on, the European energy crisis looking worse day by day, and COVID-19 lockdowns in China persisting far longer than anticipated, a soft landing could be a challenge.

[Anonymous]

US stocks climbed and the Nasdaq snapped a seven-session losing streak Wednesday as traders took in fresh economic indicators.



The Beige Book survey found that US economic growth is set to weaken further, while inflation is showing signs of cooling off.

Fed Vice Chair Lael Brainard said policymakers will fight inflation "for as long as it takes" but also noted "risks associated with overtightening."

[Anonymous]

Stocks are opening broadly higher on Wall Street, keeping the S&P 500 on track to break a three-week losing streak. The benchmark index was up three-quarters of a percent in the early going on Friday, while big gains for technology companies pushed the Nasdaq composite up 1%. The Dow Jones Industrial Average was up about half a percent. All 11 industry sectors of the S&P 500 rose, including energy stocks, which caught a break from recent declines thanks to an upturn in oil prices. DocuSign rose sharply after the electronic signature company reported strong second-quarter sales and raised its subscription forecast.



U.S. Federal Reserve chairman indicated that interest rate increases will likely be within expectations. Futures for the Dow Jones Industrial Average and the S&P 500 climbed 0.7%, putting them on track to break free after three consecutive weeks of losses.

[Anonymous]

U.S. stocks dropped sharply Tuesday after an unexpected monthly rise in the August consumer-price index dashed hopes for a further slowdown in inflation and reinforced expectations Federal Reserve policy makers will continue to aggressively tighten monetary policy.



What's happening

The Dow Jones Industrial Average was down 705 points, or 2.2%, at 31,676.



The S&P 500 was down 103 points, or 2.5%, at 4,007.

The Nasdaq Composite tumbled 380 points, 392 points, or 3.2%, to 11,873.

On Monday, the Dow rose 230 points, or 0.7%, the S&P 500 increased 1.1% and the Nasdaq Composite gained 1.3%. The S&P 500 had climbed 5.2% over the last four trading days through Monday.

[Anonymous]

U.S. stocks dropped sharply Tuesday after an unexpected monthly rise in the August consumer-price index dashed hopes for a further slowdown in inflation and reinforced expectations Federal Reserve policy makers will continue to aggressively tighten monetary policy.



What's happening

The Dow Jones Industrial Average was down 705 points, or 2.2%, at 31,676.



The S&P 500 was down 103 points, or 2.5%, at 4,007.

The Nasdaq Composite tumbled 380 points, 392 points, or 3.2%, to 11,873.

On Monday, the Dow rose 230 points, or 0.7%, the S&P 500 increased 1.1% and the Nasdaq Composite gained 1.3%. The S&P 500 had climbed 5.2% over the last four trading days through Monday.

Inflation is hurting investments..



We're okay, we're not retiring soon.

[Anonymous]

Former IMF chief economist Kenneth Rogoff said hat the U.S. is in a productivity recession, that wages are worse than they seem and the Fed's strategy is not enough to cool inflation as markets have not fully absorbed how much interest rates will climb.

[Anonymous]

Former IMF chief economist Kenneth Rogoff said hat the U.S. is in a productivity recession, that wages are worse than they seem and the Fed's strategy is not enough to cool inflation as markets have not fully absorbed how much interest rates will climb.

Wage increases are not close to the rate of inflation.

[Anonymous]

Intensifying its fight against high inflation, the Federal Reserve raised its key interest rate Wednesday by a substantial three-quarters of a point for a third straight time and signaled more large rate hikes to come — an aggressive pace that will heighten the risk of a deeper recession.



The Dow, TSX and Nasadaq are all tanking as a result of this foolish move.

[Anonymous]

Gobal markets came under more pressure Friday as the mood over the economic outlook around the world turned sour. Equities, currencies, other asset classes – virtually nothing has been spared in the economic cyclone that has been mounting over the past few weeks. Here's what economists and analysts have their eyes on during this trading day:



Markets in Turmoil

Indices are down across the board in Friday trading. The S&P TSX composite index slumped over 2.5 per cent in the first hour to 18,516 as  energy shares fell to their lowest in over two months and oil prices gave up 6 per cent.



The U.S. markets fared no better.  The S&P 500 fell about 1.7 per cent to 3,692 by 10:40 a.m. ET and the Dow Jones slipped 1.5 per cent to 29,616. Goldman Sachs Group Inc. cut its target for the S&P 500 Index from 4,300 to 3,600 by the end of the year, pointing to a shift in interest rate expectations and how they would weigh on equities.



Bank of America Corp. strategists are pointing to a "cash is king" attitude among investors who are showing the most pessimistic attitude towards the markets since the 2008 global financial crisis. Cash inflows hit US$30.3 billion as global equity funds outflows went to US$7.8 billion, bonds lost US$6.9 billion, and gold investment dropped US$400 million during the week of Sept. 21, according to the bank.



The latest retail data from Canada was also disappointing Friday, with sales falling 2.5 per cent in July as lower gasoline prices contributed to the decline. While Canadians were saving money on fuel, the cash windfall did not go to other retailers, said Desjardins managing director and head of macro strategy Royce Mendes said in a note after the data. Mendes also said the modest rebound of 0.4 per cent in nominal retail sales that Statistics Canada estimates for August may point to higher volumes.



"That said, the trend is clear, consumers are pulling back on spending," Mendes said. "The slowdown in consumption is exactly in line with what the Bank of Canada is trying to engineer with its rate increases."

[Anonymous]

Morgan Stanley's Chief U.S. Equity Strategist Michael Wilson said that he's convinced a corporate earnings recession is coming—and that it could be worse than a "normal" recession.



Wilson said in a Sept. 26 interview with CNBC's "Squawk Box" that his team at Morgan Stanley is looking closely at the U.S. business earnings story and the impact of corporate profits on equities, which have been on a wild ride in recent months.



"We think it's unavoidable ... to avoid an earnings recession and that's what matters for stocks," Wilson said, with his remarks coming on the same day that the so-called Wall Street fear gauge soared to its highest level since mid-June when U.S. equities last hit a bear market bottom.

[DKG]

With inflation-fearing central banks racing each other to ramp up borrowing rates there have now been nearly 300 interest rate hikes over the last year.



"2022 in a Nut: Inflation shock caused rates shock which now threaten recession shock and credit event," BofA analysts said, explaining that peace, globalisation and easy money was being replaced by an "inflationary era of war, nationalism, fiscal panic, quantitative tightening, high rates, high taxes".



This quarter did have a spell of optimism when MSCI's 47-country world stocks index rallied 10% between July to mid August. But the Fed's rate hike wrecking ball soon came swinging back in, and that index has plunged 15% since, leaving it down 25% and $18 trillion year to date.



Wall Street's bear market meanwhile is now 268 days old and notched a peak-to-trough decline of about 24%. That is still relatively short and shallow compared with past drops though.



Since 1950, the average U.S. bear market lasted 391 days with an average peak-to-trough drop of just over 35%, according to Yardeni Research and banks from BofA to Goldman are warning the traditional end-of-year 'Santa rally' might be cancelled.

[DKG]

While September was a brutal month for stocks, October tends to be a "bear-market killer," associated with historically strong returns, especially in midterm election years.



Skeptics, however, are warning investors that negative economic fundamentals could overwhelm seasonal trends as what's traditionally the roughest period for equities comes to an end.



U.S. stocks ended sharply lower on Friday, posting their worst skid in the first nine months of any year in two decades. The S&P 500 recorded a monthly loss of 9.3%, its worst September performance since 2002. The Dow Jones Industrial Average fell 8.8%, while the Nasdaq Composite on Friday pushed its total monthly loss to 10.5%.

[DKG]

Buy, buy, buy. The end of tightening is at hand.



Stocks look good now as the Federal Reserve appears close to ending its tightening, according to Jim Paulsen. Inflation has already rolled over and will continue to decline, the Leuthold Group's chief investment strategist said.

"Historically, peak inflations have been very good times to buy the stock market," said Paulsen.



Wall Street strategist Jim Paulsen said the Federal Reserve's tightening campaign may be close to finished as inflation has already peaked, which historically has been a good time to buy stocks.



While Fed officials have said they are committed to bringing inflation down to their 2% target, Paulsen said their work is nearly done.



"I don't even know if the Fed has to do anything anymore," he said. "I think the war with inflation has probably been won, we just don't know it yet. Historically, peak inflations have been very good times to buy the stock market."



He noted the S&P 500's valuation is at relatively low levels, and that investor sentiment is very pessimistic, which is often seen by market contrarians as bullish for stocks.

[Anonymous]

Launder your ill gotten gains through casinos and real estate.

[DKG]

The US added more jobs than epected in September. This guarantees more interest hikes are coming  pushing markets down.