The Chairman of the Federal Reserve, Jerome Powell, promised this Wednesday not to allow the US economy to fall into a “higher inflation regime”, even if that means raising interest rates to levels that put economic expansion at risk. All three major indices will post their second consecutive quarterly decline for the first time since 2015.
Large market capitalization stocks such as Microsoft Corp, Apple Inc, Amazon.com and Tesla fell to -5.2% this Wednesday, leading the day’s declines. Looking ahead to the second half, markets will continue to focus on inflation, unemployment and interest rate hikes along with their impact on corporate earnings.
“Many were expecting the inflation data to really start to come down. But what we’re finding is… it’s staying up longer and probably hasn’t peaked.”said Sam Stovall, chief investment strategist at CFRA.
2022 has been tough on the economy and tough on the stock market. The economy has failed to keep up with growth, with high interest rates tightening liquidity to quell inflation. At the same time, disruptions to supply chains due to the war in Ukraine and China’s closures due to Covid outbreaks were added.
Investors are now watching whether the market could point to a recovery in the second half, or if the bearish terrain will continue and the bottom has not yet arrived.
Source: Ambito
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