This week is a big week for the markets. On Wednesday 1st May 2024 the FOMC interest-rate decision will be announced, followed by Powell's press conference.
Bank of America's US economist Michael Gapen was quoted as saying:
"We expect the main message from the press conference to be that policy needs more time to work," and that "Powell will probably indicate the next move is still likely to be a rate cut, but the Fed will be in wait-and-see mode until it achieves confidence it desires on inflation."
We at investorAi agree with this thinking. We also agree with Piper Sandler's Michael Kantrowitz who was quoted, in a note to clients from Friday 26th April 2024:
"Higher rates are now a systemic problem for equities." and "at this point, it's really hard to see equities going up without rates going down".
Kantrowitz' analysis can be simplified to a relatively well-known and basic formula: When Treasury yields have risen, stocks have fallen. An ...
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