Fed and middle east conflict diminish stocks

By: Gerry Sparrow

Stocks fell for a third straight week, as Fed Chair Jerome Powell’s mixed but upbeat message could not offset the anxiety caused by the Middle East conflict.

Stocks Retreat

Markets began the week rattled by further escalation in the Middle East over the weekend. A bit of good news punctuated an otherwise sour Monday, as a stronger-than-expected retail sales report showed consumers were spending despite rising inflation.^1,2

On Tuesday, remarks from Fed Chair Jerome Powell indicated a shift in thinking—from being confident to not-so-confident about interest rate cuts in 2024. He said rates might need to stay higher until the Fed meets their 2% inflation target.^3,4

On Friday, the markets saw further declines, but investors were somewhat reassured by the perception that Thursday’s retaliatory actions in the Middle East were restricted in scope.⁵

Silver Linings

When stocks are in a downtrend, it’s important to keep perspective and realize that markets move in cycles. Here are a couple of bright spots from last week and perhaps some good news that may influence trading in the week ahead:

• While Chair Powell said last week that the Fed may keep rates higher for longer, he also said the Fed does not intend to raise rates for now.
  
• Despite inflation concerns, individuals were in a spending mood in March. Retail sales increased 0.7% for the month, more than twice the consensus forecast.
  
• “Earning season” picks up during the next four weeks. For the week ending April 26, more than 800 companies will give updates on business conditions in Q1.⁶

PHOTO CREDIT :https://www.shutterstock.com/g/gorodenkoff

Via SHUTTERSTOCK

Footnotes and Sources

^{1. The Wall Street Journal, April 19, 2024}

^{2. CNBC.com, April 15, 2024}

^{3. The Wall Street Journal, April 16, 2024}

^{4. CNBC.com, April 16, 2024}

^{5. CNBC.com, April 19, 2024}

^{6. MarketWatch, April 19, 2024}

^Disclosure: 

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