Posted on 09/20/2022 11:34:16 AM PDT by Signalman
Stocks tumbled on Tuesday as the sell-off on Wall Street mounted and investors braced for another large rate hike due out Wednesday from the Federal Reserve.
The Dow Jones Industrial Average fell 450 points, or 1.45%. The S&P 500 shed 1.4% and the Nasdaq Composite slid 1.2%.
The Federal Open Markets Committee began its two-day policy meeting on Tuesday, where central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have tumbled in recent weeks as comments from Fed Chair Jerome Powell and an unexpectedly hot August consumer price index report caused traders to prepare for even higher rates until inflation cools.
Rates marched higher as equities fell, with the yield on the 2-year Treasury note notching a fresh high dating back to late 2007. The yield on the 10-year Treasury reached 3.593% — levels not seen since 2011.
The move higher in the 10-year is likely contributing to the turmoil in equity markets on Tuesday, said Cresset Capital’s Jack Ablin.
“Investors have pretty well digested the 75 basis point hike tomorrow but perhaps there’s some concern that the rhetoric at the press conference could be still extremely hawkish,” he added.
Investors will keep an eye on the central bank’s projections coming out of its meeting in an attempt to gauge how much further interest rates may rise and its implications for the economy.
Meanwhile, Ford shares slumped after announcing that supply chain issues would cost an extra $1 billion in the third quarter.
Housing market data released Tuesday showed an unexpected jump in starts for August, although building permits saw the biggest decline since April 2020.
Tuesday’s move followed a choppy trading session that saw stocks rise in the afternoon and snap a two-day losing streak.
I would not be surprised.
Yep. Our rates are not high enough. The Fed will have to raise them some more to curtail economic activity to tame inflation. They were way late too put on the brakes. Now we are paying for it. Right now there is still a labor shortage. So the Fed isn’t doing enough right now.
My 201k is fine.
-PJ
Perspective:
S&P increase last 3 years 30.19%
S&P increase last 3 months 2.42%
The same prudent investor, already down 18-20% from Jan 2022 is likely to lose another 15% during next 12 months. And to get back to high set on Jan 2022, my crystal ball says 2 to 3 years wait. Hopefully this prudent investor has enough cash on hand to last 2 to 3 years if she should not sell for living expenses.
SPX 500 should begin new high’s from Jan 2022 in 3 more years.
“ But Biden just said that the stock market is not the economy.”
I’d like a broken clock, he is right on that point. Of course, a broken clock is right twice a day so there’s that.
Until he starts taking credit for it as proof that the economy is getting better.
-PJ
Closing at -313.45 / -1.01% on the Dow today.
The NASDAQ composite index was down 0.95% (-109.97).
The S&P 500 index was down 1.13% (-43.96).
Th Russell 2000 Small Capitalization index was down 1.4% (-25.34).
-PJ
Another 3/4 increase coming tomorrow.
But that prudent investor will struggle to make up for the fact that his cash is losing 10% to 20% of its value each year.
Stocks fell in 6 weeks starting in mid november 2021 by some 1/3rd.
Hard to be prepared for that!
No, you are wrong.
The current inflation is 8%, far less than the overstated 20% you try to foist on the forum
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