At the Federal Open Market Committee (FOMC) meeting slated for Tuesday and Wednesday this week, the Fed is expected to raise interest rates by as much as 75 basis points.
The United States stock market is retrogressing further as investors are taking a cautionary approach as evidenced in the plunging Nasdaq 100 futures.
The futures tied to the tech index slumped by 0.74% while those of the Dow Jones Industrial Average (INDEXDJX: .DJI) shed off 179 points or 0.53%. The futures tied to the S&P 500 (INDEXSP: .INX) were not also spared from the slump and were down 0.6% in pre-market trading.
The current losses were ushered in last week after the Bureau of Labor Statistics released its Consumer Price Index (CPI) data and other core markers that pointed out that inflation was pegged at 8.3%. While this arguably comes off as a milder figure compared to the 8.5% recorded in July, it is still sky high and the Federal Reserve has revealed how it will not sit back until the inflation level is down to the 2-4% range.
At the Federal Open Market Committee (FOMC) meeting slated for Tuesday and Wednesday this week, the Fed is expected to raise interest rates by as much as 75 basis points. Should this be the hike that will be announced, it will be the third time in a row the Fed will be raising rates this way.
The stock market indices dropped massively last week with the bearish anticipation brought about by the uncertain inflation offsets. Considering the economic outlook, an American multinational conglomerate holding company focused on transportation, e-commerce, and business services, FedEx Corporation (NYSE: FDX) gave a warning that the global economy may be “significantly worsened.”
Nasdaq 100 Futures, Indexes, and Project Rate Hike
The pressure on the Nasdaq 100 futures may be compounded this week as the projected meeting of the Federal Reserve will take into account the economic growth and inflation data that has been released thus far. Also, it will take into account the August housing data that is bound to be released on Tuesday.
“As the S&P 500 hovers below the all-important 3,900 level, and the 10-year Treasury yield inches ever closer to 3.5%, the Fed-sensitive 2-year Treasury note flirts with 3.9%, suggesting that the Fed’s aggressive campaign to kill off inflation is to be taken seriously,” said Quincy Krosby, chief global strategist for LPL Financial. “The canary in the coal mine may not yet be dead, but is probably struggling to breathe.”
With the current market outlook, choosing what to invest in calls for a major permutation among investors and traders. While the primary focus is to maintain the current asset or capital base, investors are also interested in positively changing their status quo with possible profits in these uncertain times.
With indexes, stocks, and the broader cryptocurrency industry buckling under the weight of these uncertain economic times. Nonetheless, investments like specialized Exchange Traded Funds (ETF) that have the potential to spike upwards when the market conditions are right are some of those that investors should analyze and place their bets on provided they have the needed risk appetite.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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