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On Friday, the stock market saw a nice bid following Amazon.com's earnings report and the July employment report. However, that bid fell by the wayside in afternoon action, and the major indices ended the week lower.SourceMoneyGuru-https://www.mgkx.com/5054.html
Today, a rebound effort is afoot, but the stock market isn't necessarily putting its best foot forward. There is a little reflexive, buy-the-dip action in play, but an air of interest rate angst is also hanging over the market to keep things in check.SourceMoneyGuru-https://www.mgkx.com/5054.html
The 2-year note yield is up four basis points to 4.82% and the 10-year note yield is up two basis points to 4.08%. Fed Governor Bowman (FOMC voter) has stirred up some of the angst, saying in a speech that she thinks additional rate hikes are likely to be needed to get inflation to the Fed's goal. New York Fed President Williams (FOMC voter), meanwhile, said he thinks the Fed is close to its peak rate, but that there is some uncertainty as to how long the Fed will need to stay at a restrictive level.SourceMoneyGuru-https://www.mgkx.com/5054.html
It should probably come as little surprise at this juncture to hear some competing views out of the Fed; nonetheless, the market is anxious to hear the Fed publicly coalesce around the idea that it is done, and that has yet to happen.SourceMoneyGuru-https://www.mgkx.com/5054.html
The July Consumer Price Index, which will be released before Thursday's open, will factor into the Fed's decision-making process. If nothing else, it will provide a talking point throughout this week along with the last rush of earnings reporting for the June quarter.SourceMoneyGuru-https://www.mgkx.com/5054.html
Overall, the market is still trying to find its footing in a rising interest rate environment. Investors are looking for signs that inflation is peaking and that the Fed is close to being done hiking rates. Until then, the market is likely to remain volatile.SourceMoneyGuru-https://www.mgkx.com/5054.html
Here are some key takeaways from today's market action:SourceMoneyGuru-https://www.mgkx.com/5054.html
- The stock market is trying to rebound from a volatile week, but it is facing headwinds from rising interest rates and inflation concerns.
- Fed Governor Bowman's comments on additional rate hikes have stirred up some angst in the market.
- Investors are looking for signs that inflation is peaking and that the Fed is close to being done hiking rates.
- The July CPI report will be a key release this week for the Fed and the market.
What does this mean for investors?
Investors should remain cautious in a rising interest rate environment. The market is likely to remain volatile until there are more signs that inflation is peaking and that the Fed is close to being done hiking rates.SourceMoneyGuru-https://www.mgkx.com/5054.html
Investors should focus on stocks that are well-positioned to weather rising interest rates, such as defensive stocks and dividend-paying stocks. They should also consider investing in international stocks, which may be less sensitive to rising interest rates in the U.S.SourceMoneyGuru-https://www.mgkx.com/5054.html
Investors should also stay on top of economic data and Fed commentary. This will help them to gauge the pace of interest rate hikes and the outlook for the economy.SourceMoneyGuru-https://www.mgkx.com/5054.html SourceMoneyGuru-https://www.mgkx.com/5054.html
