By Selina Stoller, Summit Consumer Receivables Acquisitions, LLC ***
Even though U.S. stocks declined at the end of the day, investors are closer to getting highly anticipated answers to long-standing questions.
Monday’s drop in the major U.S. equity indices comes following the Dow’s first weekly decline in 2019. The S&P 500 fell 0.39 percent as of market close with the Healthcare sector leading declines. The Dow declined the most since February 7, falling 0.79 percent and the Nasdaq slipped 0.23%.
Year to date, equity performance has so far been strong with the S&P positioning an 11.5 percent gain between January and February – the best two-month start since 1991.
The slight market regressions come on the heels of an impending trade deal between the U.S. and China that could come as soon as the end of March.
Both countries are reportedly nearing a trade deal that would involve Beijing lowering tariffs on American farms, chemical, auto, and other products and increasing purchases of American goods. Part of the deal would also include the U.S. lifting many or all tariffs on Chinese products.
According to Powell, the Federal Reserve is close to a timetable on when it will stop reducing the amount of bonds it’s holding on its balance sheet. During the financial crisis, the central bank bought the bonds in an effort to lower long-term interest rates and stimulate the economy – determining the ultimate size and composition of the fixed income portfolio has been a key concern for investors.
Investors have been nervous about how much further the Fed will tighten monetary policy.
The central bank considers 2 percent a healthy level for inflation but has fallen short of that target through much of the recovery. Powell also clarified that the Fed is not considering raising its inflation target.
“We are not looking at higher inflation target, full stop,” Powell said while adding the Fed is examining ways to “more credibly achieve” its target.
- 5 Mar, 2019
- Josh Smith