Skip to content
Ethereum Business

Ethereum Business

Disney Business

Primary Menu
  • business & finance
  • business proposal
  • Great Business
  • business
  • business news
  • finance
  • About Us
    • Advertise Here
    • Contact Us
    • Privacy Policy
    • Sitemap
  • Home
  • Why Wednesday Could Be a Huge Day for the Stock Market | Personal Finance
  • business & finance

Why Wednesday Could Be a Huge Day for the Stock Market | Personal Finance

By Randell Ortelli 11 months ago

[ad_1]


(Bram Berkowitz)

On Wednesday morning, the U.S. Bureau of Labor Statistics will release June data from the closely watched Consumer Price Index (CPI), which tracks the prices of a basket of daily goods and services. Investors use the CPI as one way to measure inflation, which has hit a 40-year high this year and forced the Federal Reserve to become increasingly hawkish in terms of monetary policy.

While CPI data comes out every month, the reading on Wednesday will be watched more closely than normal, as are the current high levels of inflation. That’s why the data on Wednesday has the potential to significantly move markets one way or the other. Here’s why.

High inflation has been crushing stocks

The high levels of inflation seen this year have become a real problem. Prices on everything from gas to food to rent have been sky-high, and this has investors worried about the state of the consumer, which can really drive the economy one way or the other.

People are also reading…

US Consumer Price Index YoY data by YCharts

In May, the CPI rose a whopping 8.6% from May of 2021 and came in higher than the 8.3% rate economists had been projecting. Many investors right before the May report had thought that consumer prices and therefore inflation had peaked. This needs to happen because if inflation persists, the Federal Reserve will have to keep being aggressive with interest rate hikes. The Fed has already done one 75-basis-point (0.75%) hike, in June, and another could be on the docket for later this month.

Rate hikes are problematic for stocks because they raise the cost of debt for consumers, make it more expensive for businesses to operate, and reduce future cash flows. They also make safer assets yield more, putting pressure on high valuations.

With such rapid rate hikes, the Fed could also tip the economy into a recession, something that many investors think has already happened. The Fed has also acknowledged that it will have to get more restrictive with its monetary policy if inflation doesn’t peak soon. Unfortunately, many experts do not believe June data will be friendly to the market.

Deutsche Bank‘s chief U.S. economist, Matthew Luzzetti, recently told Yahoo! Finance that his team thinks the CPI will show a year-over-year increase of close to 9% in June. While he thinks the recent decline in oil and gas prices should be helpful, Luzzetti also said that he thinks Wednesday’s report will be all about rents, which have been marching higher this year. Luzzetti explained:

And if you get another strong [inflation] print there, it’s really evidence of broad-based underlying inflation pressures in the U.S. economy at a time where very clearly growth is slowing. And I think that puts the Fed in a bind. So far, we’ve heard them remain hawkish. We think they continue with a 75-basis-point rate hike at the end of this month. But later this year could be quite difficult for them if inflation remains elevated and the labor market begins to weaken.

Stocks may move significantly on Wednesday

I have no idea what the CPI will come in at on Wednesday or how the market will react. But if the CPI reads higher than economists are expecting, stocks may sell off on concerns about persistent inflation. If it comes in lower, investors may start buying stocks, and the Fed might even consider a 50-basis-point rate hike at its July meeting. There’s no way to know for sure because investors don’t always behave rationally.

But keep in mind that the CPI data about to come out is for June, so while it is an important snapshot, it is a snapshot of the past, and the situation may have already changed.

I would not recommend buying or selling stocks specifically in preparation for Wednesday’s report release because the market is extraordinarily volatile right now and is nearly impossible to time (not trying to time the market is generally good advice for long-term investors anyway). Continue to buy good companies with good long-term outlooks at good valuations. But it wouldn’t hurt to prepare yourself mentally for some potential market movement on Wednesday.

10 stocks we like better than Walmart

When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Stock Advisor returns as of 2/14/21

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Get the latest local business news delivered FREE to your inbox weekly.

[ad_2]

Source link

Tags: "Women'S Business Casual, Amazon Fba Business, Atlanta Business Chronicle'S, Boss Baby Back In Business, Business Administration Degree, Business Attire Women, Business Card Design, Business Cards Templates, Business Casual Dress, Business Casual Outfits, Business Checking Account, Business Credit Card, Business For Sale Near Me, Business Intelligence Platform, Business Lawyer Near Me, Business Loan Calculator, Business Name Ideas, Business Professional Women, Business Spectrum Login, California Business Entity Search, Capital One Spark Business, Carl Weber'S The Family Business, Charlotte Business Journal, Custom Business Cards, Delaware Business Search, Fl Sos Business Search, Florida Business Search, Harvard Business Publishing, Insurance For Small Business, Kelley School Of Business, Maryland Business Express, Maryland Business Search", Moo Business Cards, National Business Furniture, New York Business Search, Ohio Business Gateway, Onedrive For Business, Online Business Ideas, Paramore Misery Business, Risky Business Cast, Small Business Insurance, Spectrum Business Customer Service, Tom Cruise Risky Business, Us Small Business Administration, Verizon Wireless Business, Verizon Wireless Business Login, Virtual Business Address, What Is Business Administration, Yelp Business Login, Yelp For Business

Continue Reading

Previous M&G takes ‘substantial’ stake in Finance Ireland as ISIF exits business
Next IT cost surge drives business automation | Information Age
June 2023
M T W T F S S
 1234
567891011
12131415161718
19202122232425
2627282930  
« May    

Archives

  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • December 2021
  • October 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • December 2020
  • November 2020
  • November 2018
  • October 2018
  • January 2017

Recent Posts

  • 7 tips to get your Self Assessment tax return right
  • Critical Mention 2021 Recap
  • How to Cure “Lonely Marketer Syndrome”
  • The One Way to Combat Quiet Quitting: Open-Book Management
  • LOBO Application – Data Centre Maintenance

BL

buildinglink.buybacklinks.online/agence-seo

Tags

""Succeeded His Business"" 2 Of Cups Business 525 Business 5 Bankruptcies Accounting Business Letter To Client Bracken Business Communications Clinic Business Account No Deposit Business Administration Fafsa Business Balance Sheet Explained Business Card Business Card Printing La Plata Business Cards Media Bar Business Card To Secret Website Business Central Png Business Coaching Site Cloudfront Business Contract Lawyer 47201 Business Marketing Pearson Quizlet" Business Milleage Leager 18 Business Mobile Broadand Plans Business Plan For Supplement Company Disrupting Digital Business Harvard Ffiec Business Continuity Templates Gauge Ear Piercing Business Good Openings For Business Letters Holton Investment Business Indianapolis Business Times Indiana Wesleyan University Business List Business In Search Engines List My Business Yahoo Lunch Susbcription Business Model Morgan Hill Business Liocense Renewal Nee Small Business Bill Signed Negotiating Business Acquisitions Practical Law Networking Trends Small Business New Business In Shorewood Il School Business Officer Being Unethical Small Business Administration Mass Small Business Comunity Small Business Corporation South Africa Small Business Depew Llc Small Business Medical Offices Chicago Small Business Office Lakewood Nj Small Business Plans Verizon Small Business Storage Array Small Business Sucess Stories South Florida Business Journal Twitter

Visit Now

Home Improvement Loan Rates

scorpion removal las vegas 

Pigeon control Las Vegas

Wasp removal Las Vegas

getlinko

tinduanhanoimoi.xyz | Magazine 7 by AF themes.

WhatsApp us