November 29, 2022

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Stocks tumble with Fed, earnings, and jobs data on deck

Stocks tumble with Fed, earnings, and jobs data on deck

US stocks lagged Monday morning to Start a busy week Features Fed policy, earnings, and jobs data.

S&P 500 Index (^ Salafist Group for Preaching and Combat) is down 0.7%, while the Dow Jones Industrial Average is down (^ DJI) erase 200 points, or 0.6%. Nasdaq Technology Heavy Vehicle (^ ninth) by roughly the same margin. Treasuries rose again, settling above 4%.

Stock markets are still preparing to round the month higher after a Brutal recession in September. The Dow Jones Industrial Average is up 14.4% year-to-date as of Friday’s close — making October 10 its best month since 1915, according to data from Bespoke Investment Group. If the Dow closed just 2 basis points higher on Monday, October would overtake January 1976 as the best month since the 1930s.

The Fed’s next policy announcement on Wednesday and its monthly employment report for October due out on Friday will determine whether the tailwinds will continue. Pay the shares forward during the remainder of 2022.

US central bank officials are preparing to raise the Federal Reserve’s benchmark interest rate by another 0.75%, but some strategists I think it could be another huge hike Before officials backtrack on tightening plans.

Ian Shepherdson, chief economist at Pantheon Economics, said that with core CPI continuing to rise and salary earnings averaging 372,000 during the third quarter, investor expectations that policy makers will continue to raise interest rates next year are justified.

“But we see enough straw in the wind now to believe that the economy is at a real tipping point, while investors are focusing a lot on the data, which now appears to indicate that growth is holding up well,” he said.

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WASHINGTON, DC – OCTOBER 14: US Federal Reserve Chairman Jerome Powell attends a meeting of the International Monetary and Financial Committee (IMFC) at the International Monetary Fund and World Bank Annual Meetings at IMF Headquarters, October 14, 2022 in Washington, DC. (Photo by Drew Angerer/Getty Images)

“We suspect President Powell’s tone will change dramatically this week, but he won’t be able to turn the tide if the numbers change,” Shepherdson added.

The Labor Department’s jobs report is expected to show monthly salaries drop below 200,000, a significant drop from the 400,000 average across much of the pandemic recovery but still close to the pre-pandemic monthly average. Economists expect 190,000 jobs to be added or created last month, according to Bloomberg estimates.

On the earnings front, companies are still reporting third-quarter results. Among the companies in the S&P 500 reported so far, the index’s net profit margin is 12%, lower than the previous quarter’s net profit margin and lower than last year’s net profit margin, but higher than the five-year average net profit margin 11.3 %.

Bank of America analysts said in a note that earnings overall so far continued to “defy calls for a recession,” with many corporate metrics remaining above expectations.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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