Hawkish comments by Fed Chair Jerome Powell, following the announcement of another 75 basis points interest rate hike last week, cast a pall over financial markets, sending yields higher and stocks lower.
The Dow Jones Industrial Average slipped 1.40%, while the Standard & Poor’s 500 declined 3.35%. The Nasdaq Composite index lost 5.65% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 1.04%.1,2,3
The official statement released following the Federal Open Market Committee (FOMC) meeting appeared to suggest a potential for future easing of interest rates. Investors cheered the news, sending stocks higher. But the optimism was crushed 30 minutes later on hawkish comments by Fed Chair Powell during his post-meeting press conference.
Losses accelerated into Thursday, led by technology names, which were under pressure due to rising bond yields. The yield on the two-year Treasury note rose to its highest level since 2007. The sentiment took damage from workforce reduction/freeze news from multiple technology companies; some considered it a sign of a pending recession. Stocks managed to erase some of the week’s losses on Friday following a strong employment report and a drop in the U.S. dollar.4
From Dove to Hawk in 30 Minutes
In the statement accompanying the 75 basis point rate increase, the FOMC said that future increases would consider the cumulative monetary tightening to date and the lag in impact such tightening involves.5
But in his post-meeting press conference, Fed Chair Powell struck a more hawkish tone. He said that current inflation data did not support any slowdown in rate increases and that the terminal rate (the point at which rates will no longer rise) may be higher than initially expected.6
This Week: Key Economic Data
Thursday: Consumer Price Index (CPI). Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, November 4, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: The Walt Disney Company (DIS).
Wednesday: Roblox Corporation (RBLX), Occidental Petroleum Corporation (OXY).
Thursday: Becton, Dickinson and Company (BDX).
Source: Zacks, November 4, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Cash Still King As We Trudge Through This Bear Market
The markets sold off yesterday after the Fed chair’s statements about rates and their trajectory for the rest of the year. Some were surprised with hopes of a more dovish stance. I’m not entirely sure why some investors were surprised because so far Powell has been very clear that he is not going to stop until...[READ MORE]7
This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice.
Learn About ABLE Accounts
People with disabilities can use an Achieving a Better Life Experience (ABLE) account to help pay qualified disability-related expenses. Here are some things to know about ABLE accounts:
- This tax-advantaged savings account doesn't affect their eligibility for government assistance programs.
- The 2022 annual contribution limit is $16,000.
- ABLE account-designated beneficiaries may be eligible to claim the saver's credit for a percentage of their contributions.
- Eligible beneficiaries must be 18 years old at the close of the taxable year, are not dependent or full-time students, and meet the income requirements.
- Families may roll over funds from a 529 plan to another family member's ABLE account.
- Disability-related expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology, and personal support services.8
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Stay Hydrated With Infused Water
Staying hydrated is essential for our overall health, and these fun, delicious infused water options make drinking water a little more fun. Bonus points if you try them with sparkling water for a bit of fizz!
- Honeydew, cucumber, and mint
- Watermelon, kiwi, and lime
- Mango, raspberries, and ginger root
- Blackberries, orange, and ginger root
- Grapefruit, pomegranate, and mint
- Pineapple, coconut, and lime
- Blueberries, lemon, and rosemary
- Strawberries, lemon, and basil
To infuse your water with these delicious combinations, just put all the ingredients in a pitcher, add water, and remove the fruits, veggies, or herbs in 24 hours. Drinking water has never been tastier or more beautiful.9
Breakfast Grilled Cheese w/ Soft Scrambled Eggs & Pesto
Time: 15 minutes
- 4 large eggs
- kosher salt
- 4 tablespoons butter, at room temperature
- crushed red pepper flakes, to taste
- 4 slices sourdough bread
- 1/2 cup shredded sharp cheddar cheese
- 1/2 cup shredded havarti or fontina cheese
- 1/2 cup basil pesto
- 2 tablespoons fresh chopped chives
- honey, for drizzling
- Whisk together the eggs and a pinch of salt in a medium bowl.
- Melt 1 tablespoon butter in a large skillet over medium heat. Add the eggs and cook, undisturbed, until a thin layer of cooked egg appears around the edge of the skillet. Using a rubber spatula gently push/move the eggs around the skillet until fluffy and barely set, about 2 minutes. Immediately remove from the skillet and sprinkle with crushed red pepper flakes.
- Spread the outside of each slice of bread with butter. On the inside of half of the slices of bread, evenly layer the cheeses, eggs, and pesto. Add the top piece of bread, buttered side facing up.
- Place the sandwiches, one at a time, in the skillet and cook until golden on each side, about 4-5 minutes per side. Serve topped with chives, honey, and sea salt.
Footnotes and Sources
1. The Wall Street Journal, November 4, 2022
2. The Wall Street Journal, November 4, 2022
3. The Wall Street Journal, November 4, 2022
4. The Wall Street Journal, November 3, 2022
5. The Wall Street Journal, November 2, 2022
6. The Wall Street Journal, November 2, 2022
7. howardcm.com, November 3, 2022
8. IRS.gov, July 20, 2022
9. Culinary Hill, May 19, 2022
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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