Stocks Fall on Hotter-Than-Expected Inflation Data - WSJ
Category: News & Politics
Via: vic-eldred • 3 years ago • 16 commentsBy: Karen Langley and Caitlin Ostroff (WSJ)
S E E D E D C O N T E N T
Stocks suffered their worst day in more than two years after hotter-than-expected inflation data dashed investors' hopes that cooling price pressures would prompt the Federal Reserve to moderate its campaign of interest-rate increases.
Investors sold everything from stocks and bonds to oil and gold. All 30 stocks in the blue-chip average declined, as did all 11 sectors in the S&P 500. Only four stocks in the broad benchmark were in the green in recent trading. Facebook parent Meta Platforms dropped 9.4%, BlackRock declined 7.5% and Boeing fell 7.2%.
The Dow industrials fell 3.9%, or nearly 1300 points, and the S&P 500 declined 4.3%, while the Nasdaq Composite slid 5.2% as rate-sensitive technology stocks took a heavy beating. All three indexes posted their steepest one-day losses since June 11, 2020.
Investors had eagerly anticipated Tuesday’s release of the consumer-price index, which provided a last major look at inflation before the central bank’s interest-rate-setting committee meets next week. Expectations for the path of monetary policy have held sway over the markets as investors factor higher rates into asset prices and try to project how well the economy will hold up as rates rise.
“It increases the probability of recession if the Fed has to move more significantly to address inflation,” said Chris Shipley, chief investment strategist for North America at Northern Trust Asset Management.
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Inflation is far more entrenched than we thought. The markets reflect it.
Note for the Fed: It took Paul Volcker 5 years to tamper inflation down.
Meanwhile Joe Biden is celebrating the passage of his "Inflation-Reduction Act," which only adds to inflation.
Didn't he say inflation was zero?
Yes he did!
Will the voters believe him?
We can't go by extremists. Their vote will go to Biden or whoever replaces him.
They've had another terrible day
Yes, then he was told to say it was “temporary.”
Which is theoretically true ....... no matter how long it stays high ....
A real Captain Obvious moment ..... for some anyways .....
As our modern day Nero fiddled:
"Today offers proof that the soul of America is vibrant. The future of America is bright and the promise of America is real," Biden told the crowd.
About a third of the Nasdaq is gone.
Has anyone noticed that the price of gold has remained flat? The stock market falls and gold takes a hit. Gold fell 1.63 pct today. Treasury yields have been steadily increasing. Another oddity is that the spot dollar took a big jump today, too. It doesn't look like anyone is running for safety.
High inflation is supposed to mean that the value of the dollar is falling. But the opposite is happening. We've seen a stream of announcements for new investments in US manufacturing; semi-conductors, batteries, EVs, biotech. As recently as the Obama administration the conventional wisdom was that it would be absolutely insane to invest in the United States when the dollar is strong.
So, what happened between the Obama administration and the Biden administration that has turned status quo economics on its head?
There is more trouble looming for Biden:
"Biden officials are scrambling to prevent a freight rail stoppage that could be the next big threat to the U.S. supply chain."
OMG, not another October surprise!
What a bloodbath.
Morgan Stanley says we may see another 25% decline from here.
And that means 401k's as well.