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@theMarket: Markets Get Smacked
By Bill Schmick,
11:53AM / Saturday, December 04, 2021
Most investors blame the discovery of a new, possibly more virulent mutation of the coronavirus for the decline in stocks this week. No doubt there is some truth to that, but equally as important was the change in monetary policy enunciated by Jerome Powell, the chairman of the Federal Reserve Bank, this week.   Readers have seen the S&P 500 Index decline by about 4 percent since the Thanksgiving week. The announcement that a new COVID 19 variant, dubbed Omicron, had been discovered in Africa, surprised the investment world. Friday, Nov. 26, we saw a substantial 2 percent downdraft in the financial markets. The move was exaggerated by the absence of a sizable number of

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@theMarket: Market's Week of Indecision
By Bill Schmick,
11:51AM / Saturday, November 20, 2021
Stocks and bonds traded in a tight range for most of the week. Some stocks were rewarded, while others punished, based on their earnings results. The U.S. dollar hit a series of new yearly highs, and just about everyone is waiting for President Biden's pick to head the Federal Reserve Bank.   That announcement could come as early as this weekend. Chairman Jerome Powell's term will end in February 2022. He is a Republican, picked by former President Donald Trump. He had a somewhat rocky relationship with the ex-president but did manage to maintain the independence of the central bank despite Trump's attempted interference. His track record through the pandemic

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@theMarket: Annual Inflation Hits 30-year Highs
By Bill Schmick,
03:45PM / Friday, November 12, 2021
The stock and bond markets knew inflation was coming. This week's 6.2 percent jump in the Consumer Price Index drove home the fact that inflation has become a fact of economic life, at least for the near future.   The jury is still out on whether inflation will prove to be "transitory" as the Federal Reserve Bank argues and as some economists believe. Others fear that we could be on the verge of something a little more serious. The fear is that the Fed might be forced to raise interest rates if that were the case.   The Producer Price Index (PPI) and the Consumer Price Index (CPI) both came in a little warmer than forecasted on a year-over-year

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@theMarket: Markets Get a Green Light
By Bill Schmick,
05:14PM / Friday, November 05, 2021
The Federal Reserve Bank signaled an all-clear for the financial markets this week. The tapering they promised will begin on schedule, but Fed Chairperson Jerome Powell has no plans to raise interest rates until at least some time next year.   The announcement was met with relief. Investors reacted by catapulting the stock market to yet another higher high. Bond traders were somewhat mollified, as well as seen by the lack of movement in interest rates. If anything, Chair Powell was a bit more dovish than investors expected.   He surprised markets by reducing the size of the monthly taper, which will begin later this month. At present, the U.S. Central Bank is

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@theMarket: Good Earnings Support Markets
By Bill Schmick,
03:51PM / Friday, October 29, 2021
Third-quarter earnings have cheered investors, sending markets to new highs. The bullish wave of buying was so strong that investors ignored the disappointing third quarter read on the nation's Gross Domestic Product (GDP).   Economists were looking for the economy to grow by 2.6 percent, but instead, GDP gained a mere 2 percent, which was the slowest rate in over a year. Economic activity was damaged by the Delta variant as well as continuing supply-side constraints. The market's reaction indicates that investors are looking through the weak number and expecting the economy to continue to grow.   It seems to be a question of demand versus supply. Yes,

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