S&P 500 circles new 2022 lows after latest Fed rate hike: Is a recession inevitable? – SPDR S&P 500 (ARCA:SPY)

SPDR S&P 500 ETF TRUST Detective More heavy losses were hit this week in response to another aggressive Federal Reserve interest rate hike, and the S&P 500 index is heading back to its 52-week low of 3,636 in June as the market nears Friday.

Investors are becoming increasingly concerned that the Fed will be unable to bring inflation under control without triggering a US recession. The Dow Jones Industrial Average hit a new 2022 low in intraday trading, while the S&P 500 ended the week less than 1% off new lows.

On Wednesday, the Federal Open Market Committee raised its fed funds target range by 0.75% to between 3% and 3.25%.

The move marks the third 0.75% increase for the Fed in four months as it battles inflation. In its updated economic projections, the Federal Reserve raised its outlook for 2022 personal consumption index inflation to 5.4%, up from 5.2% in June.

In response to the rate hike, interest rates on two-year and 10-year US Treasury bonds rose to their highest levels in more than a decade. Ten-year rates traded at 3.68% on Friday, while two-year Treasury rates were up around 4.2%.

On Wednesday, the CEO of DoubleLine Capital and the so-called “Bond King” Jeff Gundlacho told CNBC that the Federal Reserve waited too long to raise rates and is now being too aggressive with its policy tightening, threatening the health of the US economy. Gundlach said the likelihood of a US recession in 2023 is now “at 75%”.

Ford Motor Company F Shares are down 19% this week after the Michigan automaker warned investors it would cost the company an additional $1 billion in inflation and supply chain costs in the third quarter.

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Half cooked: Canadian Cannabis Company Shares Aurora Cannabis Inc. ACB Business was down 12% on Wednesday morning, when the company reported a higher-than-expected net loss of $462 million in its fiscal fourth quarter.

In the coming week, investors will receive more quarterly earnings reports from Sanskar Aid Corporation Red, Nike Inc. nke, Micron Technology, Inc. mu And Bed Bath & Beyond Inc. bbby on Thursday.

According to FactSet, Wall Street analysts currently have the highest percentage of “buy” ratings among the S&P 500 energy and information technology sectors.

Economic Number: In the coming week, investors will receive key economic updates on Tuesday when the Conference Board releases its September US Consumer Confidence Reading and on Wednesday when the Federal Reserve Chair. Jerome Powell Speak at the 2022 Community Banking Research Conference.

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