Should you buy stocks now, or wait?
Timing the market has been a nagging question for investors ever since the stock market began its decline by roughly 25% in January this year. The right answer likely hinges on whether or not the Federal Reserve follows through with plans to raise its benchmark interest rate to 4.5% or higher next year.Timing the market has been a nagging question for investors ever since the stock market began its decline by roughly 25% in January this year.
The peak in interest rates matters for stocks Historical market data can give investors a good reason to be skeptical about the credibility of the Fed’s forecasts while market based expectations captured by the Fed funds futures markets and bond yields may be no more reliable. Still a factor that differentiates modern times from the persistent inflation of the 1980s is the elevated level of geopolitical and macro-economic uncertainty. As Tavi Costa, portfolio manager at Crescat Capital, said, the weakening U.S. economy, plus fears of a crisis breaking out somewhere in global markets, are complicating the outlook for monetary policy.
However, some on Wall Street are paying less attention to the Fed and more attention to market-based indicators like Treasury spreads, relative moves in sovereign bond yields, and credit-default spreads, including those of Credit Suisse Inc. CS Tavi expects trading in fixed-income to become as disorderly as it was during the spring of 2020, when the Fed was forced to intervene to avert a bond market collapse at the onset of the coronavirus pandemic.
Looking ahead to next week Looking ahead to next week, investors will receive some more insight into the state of the U.S. economy, and, by extension, the Fed’s thinking.
France Dernières Nouvelles, France Actualités
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