The trio of US stock indices suffered a similar fate. The Dow Jones Industrial Average (DJIA) slipped 4.15% in value, while the S&P 500 and Nasdaq fell 4.77% and 5.5% respectively this week.
In fact, the S&P500 has already erased all of its gains from last week. One signal that the economy in the US is not doing so well came from FedEx Corp. which recently withdrew its profit estimate amid poor business conditions. According, to the withdrawal of FedEx’s estimate, is crucial as we know that their business line is in freight forwarding. If the expedition business is not moving smoothly, it could mean that people’s purchasing power is at its worst.
This week was also filled with short sellers as the market was hit by news of high US inflation despite easing commodity prices.
The Fed’s monetary policy, one of the most important factors in the investment world today, is in the spotlight for investors next week as the US interest rate decision will be made. This will answer how the Fed addresses the current runaway inflation.
According to research from Bank of America, the market’s lowest point in the 7 bear markets before now fell after the Fed cut rates or 11 months after they raised rates. In other words, investors are expected to be more cautious and wait for a clear direction from the central bank.
Last week, investors had actually started to aggressively bet their estimates on technology stocks. However, US economic data said otherwise. One of the highlights fell on Facebook’s parent Meta Platforms Inc which has hit its lowest level since early 2019, down 14% this week.
However, don’t be discouraged, Money Hunter pals! also sees that the market will triumph again when the Fed says that they will slow down their monetary policy tightening. However, no one knows when that will happen. The step that can be taken is actually to buy in installments or what we usually know as dollar cost averaging during this uncertain time.