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@theMarket: Stocks Drop as Fed Delivers Same Dire Message
By Bill Schmick,
03:25PM / Friday, September 23, 2022
It was another "read my lips" moment for equity investors. Federal Reserve Chairman Jerome Powell out hawked the hawkish as he reiterated the Fed's tightening stance on monetary policy after the Federal Open Market Committee meeting on Sept. 21.   That should come as no surprise for those reading this column every week. A 75-basis-point hike, which was expected, was followed by a promise to continue raising interest rates higher, and longer than investors expected.   The eventual terminal rate where investors hope the tightening will be done, has now ratcheted higher to 4.6 percent. Expectations are now set for another 75-basis point increase in

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@theMarket: Consumer Price Index Triggers Market Decline
By Bill Schmick,
03:33PM / Friday, September 16, 2022
Sticky inflation, as represented by Tuesday's Consumer Price Index (CPI), caught most investors off guard. The resulting equity market rout drove the three main averages down over 4 percent. It was the worst market day in more than two years. Is the selling over?   I doubt it. The rampage lower spared few stocks. The dollar soared higher and most commodities as well as precious metals plummeted. That's what happens when you get everyone on one side of the rowboat.   Many analysts, traders, economists, and retail investors had bid up stocks in the days prior to the report in anticipation that the CPI would result in a cooler inflation print. The opposite

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@theMarket: September Is Tough Month for Equities
By Bill Schmick,
02:52PM / Friday, September 02, 2022
Since 1928, the S&P 500 Index has lost ground in September more than 55 percent of the time. It looks like this year will be true to form.   It is called "The September Effect" and no one market or news event has been responsible for this anomaly. Some attribute the negative results to seasonal behavior bias. After a good summer of gains, like this summer’s bear market rally, investors make portfolio changes and cash in on their gains.   Since 1950, the Dow Jones Industrial Average has booked a decline of 0.8 percent on average. If we go back further in history (since 1928), the S&P 500 Index has averaged a 1 percent decline during

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@theMarket: Bad News from Jackson Hole
By Bill Schmick,
04:11PM / Saturday, August 27, 2022
Federal Reserve Bank Chairman Jerome Powell set investors straight at the Fed's annual Jackson Hole symposium. He said the job of lowering inflation is not done, and that the Fed will continue to raise interest rates in order to slow the economy.   "We must keep at it until the job is done," Powell said, during his speech.   That was enough to send stocks lower after a few days of gains. At the same time, the U.S. dollar fell, as did interest rate yields, which is somewhat counter intuitive given Powell's hawkish statement. The inflation data released on Friday morning showed a little progress on the fight against inflation. The Personal

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@theMarket: Markets Gain Back Half This Year's Losses
By Bill Schmick,
03:28PM / Friday, August 12, 2022
This week's decline in two key inflation indicators gave investors an excuse to buy stocks. At this point, we have retraced 50 percent of the losses from the beginning of the year. The thinking behind this recent move higher is that inflation is coming down, and the Fed no longer needs to maintain its super tight monetary policy stance. Is that a good bet?   That is not the case, according to several talking Fed heads that were trotted out by the U.S. central bank to address the markets on almost a daily basis this week. Even the most dovish of members continued to stress that nothing has changed in their thinking. To a person, each Federal Reserve member stressed that

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