What did the week carry for the Market?
- Inflation data pushed yield up: The varying reports on inflation caused apprehension that the Federal Reserve may need to keep their rate-hiking pattern for longer than predicted. On Tuesday, the Consumer Price Index reported a less-than-anticipated decrease to a yearly inflation rate of 6.4%, while a separate Thursday report showed that prices charged by producers had risen more than expected. This resulted in the yields of 2- and 10-year U.S. Treasury bonds reaching their highest point in over three months. The yield spread between the two is still inverted, with shorter-term debt yielding more than longer-term debt.
- Further market decline: The main stock indexes finished with a variety of results as traders considered some beneficial growth signs and returns along with worries that inflation might be turning in an undesirable direction. Anxiety that the Federal Reserve might have to raise short-term interest rates higher than before caused U.S. Treasury yields to go up and boosted the American dollar, which had a significant effect on oil prices and energy stocks.
The major U.S. stock indexes rose more than 1% on Monday but struggled to maintain positive momentum as new data on inflation cast a pall over the market. For the week, the S&P 500 slipped 0.2% on a total return basis, the Dow was essentially flat, and the NASDAQ added 0.6%.
- Bitcoin Gains: Bitcoin, the predominant digital currency, has observed a 14% increase in its cost over the past week and is now trading at around $24,000, which is the highest since August 2020. Just 3 months ago, Bitcoin was valued at less than $16,000 and in the past 10 months, it has seen a peak of $48,000.
Check out the Top 5 stocks in each industry:
What to expect for the markets next week?
- Eyes of Fed minutes: On Wednesday, the Federal Reserve will release meeting minutes from the latest FOMC meeting, which could provide more insights into the future trajectory of interest rates.
- More company earnings: Earnings season continues with reports from major retailers including Walmart and Home Depot. Other prominent companies reporting next week include Nvidia, Alibaba, Coinbase, and Moderna, among others
