@theMarket: Debt Deadline Hangs Over MarketsBy Bill Schmick,
04:09PM / Friday, May 26, 2023 | |
One week before the debt ceiling deadline, members of Congress have adjourned, while a handful of negotiators continue to search for a compromise solution to the impasse. Investors are holding their breath.
As many expected, myself included, the politicians are drawing out the drama and will continue to do so until the 11th hour. Both sides have stressed that there will be no default and the market has taken them at their word. Investors have bid up stocks this week in anticipation of a positive announcement.
This week, Fitch, one of the big three American credit agencies, has put the nation's debt on a negative credit watch. The agency warned that it 0 Comments
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@theMarket: Stocks Playing a Game of InchesBy Bill Schmick,
03:24PM / Friday, May 12, 2023 | |
Bears and bulls are battling for supremacy, which is keeping stocks moving in a tight range. The question is which way will the markets break?
On the plus side, inflation does appear to be falling, or at least not going higher. Both the Consumer Price Index and the Producer Price Index came in as expected for April. Investors interpreted the data as a bit of a positive in the fight to control inflation. The trend is definitely down compared to last year's numbers.
Bears, on the other hand, were encouraged by the rising fears of a default on the nation's debt in less than three weeks. In addition, the ongoing regional bank contagion is alive and well. 0 Comments
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@theMarket: Banks Bashed as Fed Continues to Raise RatesBy Bill Schmick,
03:30PM / Friday, May 05, 2023 | |
The Federal Reserve Bank raised interest again, even as another regional bank saw its stock price collapse. Investors are asking when enough tightening is enough.
The key Fed funds interest rate was hiked by another 0.25 percent, which increased its benchmark rate to between 5 percent and 5.25 percent. That was the 10th hike in 14 months and has pushed interest rates to a 16-year high.
The stock market sold down after Chairman Jerome Powell made it clear (again) that fighting inflation is the Fed's number one objective. Powell did hold out some hope that this hike could be the last, although that decision, he said, would be data-dependent and be 0 Comments
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@theMarket: Investors Await Fed WeekBy Bill Schmick,
03:20PM / Friday, April 28, 2023 | |
All eyes will be focused on May's Federal Open Market Committee meeting (FOMC) this week. Most investors are expecting another quarter-point interest rate increase, and there is an ongoing debate over the possibility of another one in June.
Some strategists believe that may be overkill. The fear is that the Fed could break something else if they do. Many already blame the Fed's rapid hiking of interest rates for the troubles within the regional bank area. The value of Silicon Valley Bank's U.S. Treasury bond holdings, for example, fell by billions of dollars as the Fed tightened monetary policy over the last year.
And the banking worries 0 Comments
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@theMarket: Markets Mark TimeBy Bill Schmick,
04:11PM / Friday, April 21, 2023 | |
First-quarter corporate earnings are pouring in, and the results have been mixed. So far, the numbers have been good enough to keep the market from falling significantly, but not good enough to warrant further gains.
It is still early days, with only 15 percent of companies reported, but so far, the best I can say is mixed. The multicenter banks continued to surprise to the upside this week, while the regionals have been so-so but not as bad as some expected. Of course, the Silicon Valley Bank debacle did not occur until toward the end of the quarter, so much of the impact won't be known until the second quarter results are announced.
Tesla, one of the 0 Comments
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