Ryan Payne, president of Payne Capital Management, explains in Varney & Co. why the Fed is stepping up and ending rate hikes as inflation slows.
Investors dumped stocks on Thursday as more headwinds emerged for the US economy as the Federal Reserve continued to raise interest rates.
The Dow Jones Industrial Average lost 764 points, or 2.2 percent, as the broader markets suffered their worst session since November.
Dow Jones Industrial Average
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IBM and Apple led the Dow’s salesoff, while Verizon remained in the green.
| Ticker | Security | last one | Change | change % |
|---|---|---|---|---|
| IBM | International Business Machines Corporation. | 142.36 | -7.50 | -5.00% |
| APL | APPLE INC. | 136.50 | -6.71 | -4.69% |
| Viz | VERIZON COMMUNICATIONS INC. | 37.77 | +0.32 | +0.85% |
The Nasdaq Composite shed more than 3.4%, weighed by Netflix and Meta.
| Ticker | Security | last one | Change | change % |
|---|---|---|---|---|
| NFLX | NETFLIX INC. | 290.41 | -27.42 | -8.63% |
| META | META PLATFORMS INC. | 116.15 | -5.44 | -4.47% |
And all 11 of the S&P’s largest sectors fell, led by tech, materials and industrials, while energy and utilities fell slightly.
| Ticker | Security | last one | Change | change % |
|---|---|---|---|---|
| XLK | Select the Technology Sector SPDR ETF | 129.20 | -5.00 | -3.73% |
| XLB | Select the Materials Sector SPDR ETF | 79.43 | -2.47 | -3.02% |
| XLI | Industry Select Sector SPDR ETF | 98.54 | -2.40 | -2.37% |
Weak readings in retail sales and manufacturing sent ripples through markets 24 hours after Fed policymakers said they would raise interest rates to 5.1% in 2023 in an effort to bring down 7.1% inflation.
Interest rate increases with a 50-basis point hike, but more signals to come
Fed Chairman Jerome Powell said during a press conference following the central bank’s 50-base rate on Wednesday that “the worst rate pain, the worst pain comes from not keeping rates higher and allowing inflation to take root in the economy.” – Point speed increase.
Peter Schiff, chief global economist at Euro Pacific Capital, and Andy Brenner, global head of fixed income at Natalliance Securities, respond to Jerome Powell’s news conference after interest rates were raised by 50 basis points.
Bank of America strategists Michael Gapen, Mark Cabana and John Sheen jointly predict a recession next year.
“We agree and continue to expect a recession in 1H 2023 and higher unemployment than the median FOMC member projects,” they wrote. Currently, the Fed expects the unemployment rate to reach 4.6% next year, from 3.7% in November.
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