top of page
  • Scott Poore, AIF, AWMA, APMA

Fed Misdirection Moves The Market

Markets didn't care for Fed Chairman Powell's comments last week and external events are starting to factor in.

The Fed continues to give mixed signals about future rate decisions and the market continues to disbelieve. Currently, Fed Funds futures show a 98% probability of no rate hike in November and a 74% probability of no rate hike in December—both having risen in the past few weeks. Meanwhile, the market is concerned about the current status of interest rates and how that may affect consumers going forward. The 30-year mortgage rate is approaching 8% and the 10-year Treasury yield is approaching 5% - both firsts since 2000.


Meanwhile, Retail Sales came in last week higher than expected and higher on a year-over-year basis.

Two consecutive months of higher Retail Sales - +0.7% in September and +0.8% in August - point to a strong consumer. Initial Jobless Claims continued to drop to the lowest rate since March of this year and have declined 25% since the peak in June of this year. There are multiple Fed speakers this week to keep the market off balance. The conflict in the Middle East is not easing and crude oil prices, which had declined, are 7% higher. Higher oil and high interest rates could put pressure on consumers.

 

Disclosures


The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.


Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.


Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.


Past Performance does not guarantee future results.

Comments


bottom of page