Weekly Market Insights: Stocks Slip After Powell Comments

Weekly Market Insights: Stocks Slip After Powell Comments

November 07, 2022

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

Powell Disappoints

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.

"If you would be loved, love and be lovable."

– Benjamin Franklin

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.

* 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.

Tip adapted from IRS.gov7

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.

Tip adapted from Culinary Hill8

Create a 13-letter word using all 13 of the following letters: O A I I S T T R R D N A M.

Last week’s riddle: What is worn by the foot and often bought by the yard? Answer: Carpet.

Iguazu Falls, Argentinian National Park, Argentina.

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. IRS.gov, July 20, 2022

8. Culinary Hill, May 19, 2022

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