Dow closed down 981 (2.8%), S&P 500 down 2.8%, Powell's hawkish remarks blamed

[progree]

Last edited Fri Apr 22, 2022, 04:32 PM - Edit history (2)

Stock market news live updates: Stocks extend losses as investors weigh hawkish Powell remarks, more corporate earnings, Yahoo Finance, 4/22/22

https://finance.yahoo.com/news/stock-market-news-live-updates-april-22-2022-225944643.html

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Early signs that the Fed's plan might be working: Morning Brief, Sam Ro, Contributor, Yahoo Finance, 4/22/22

https://finance.yahoo.com/news/early-signs-that-the-feds-plan-might-be-working-morning-brief-201032265.html

... After the March Federal Open Market Committee meeting, Fed Chair Jerome Powell said the labor market was “tight to an unhealthy level.” Specifically, he noted that at the time there were 1.7 job openings for every unemployed person. He argued that this extraordinary demand for labor has fueled significant wage inflation, which in turn has helped spur inflation across the economy.

(graph: Job postings on Indeed are falling, which is presented as good news)

It’s still early days in the Fed’s tightening effort. But so far, we’re getting early indications that job openings can indeed decline without forcing unemployment significantly higher.

If this trend is confirmed and it continues, then the Fed thinks we should begin to see wage growth slow down, which in turn should cause broad inflation reading to cool. We shall see.

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Inflation is all the greedy workers' faults, or something, I guess , even though their wage increases aren't keeping up with price increases,

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Some more Powell remarks from Thursday (I put all his remarks that were scattered throughout the article into two adjacent paragraphs) :

https://finance.yahoo.com/news/stock-market-news-live-updates-april-21-2022-223058644.html

Stocks dropped and Treasury yields climbed Thursday afternoon after Federal Reserve Chair Jerome Powell suggested he saw the case for front-loading interest rate hikes with 50 basis-point increases in order to quickly address persistent inflationary pressures. "It’s absolutely essential to restore price stability. Without price stability, really economies don’t work without price stability. We need that to have a strong labor market over an extended period of time. We need it for financial stability. So we must do that.”

“We really are committed to using our tools to get 2% inflation back," he added. "It is appropriate in my view to be moving a little more quickly. And I also think there is something in the idea of front-end loading … that points to the direction of 50 basis points being on the table.”

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EDIT: Title updated with Friday closing numbers.

S&P 500 is now down 11.0% from its Jan 3 all-time closing high

[elleng]

1. Is there logic in this, ANYWHERE?

REALLY?



(Sorry, just a retired attorney here.)

[progree]

2. Powell must be smiling: The Fluffy Puppy Indicator is flashing red for the U.S. economy

https://finance.yahoo.com/news/the-fluffy-puppy-indicator-signaling-a-recession-162927588.html

As higher prices for gas and food has consumers sharpening their budgets for the months ahead, it looks like their cuddly pets aren't immune to the cutbacks.

Over the four-weeks that ended April 9, sales of pet supplies — in other words non-food items that pets don't need to live — fell 1.9%, according to the latest data from Nielsen. That's a sharp drop-off from the 12-week average increase of 3.6%.

Pet grooming sales also plunged 19.2% while dog accessories fell 12.1% and pet bed sales declined 12.7%. The lone increase of any size came in cat litter, which saw an 11.7% gain.

[peppertree]

3. Shades of Greenspin?

Many will recall that in 1999 and 2000 - when inflation was quite tame - Greenspan began raising rates like there was no tomorrow.

Until finally, in March 2000, the gambit succeeded: the markets got cold feet, and loan volumes dropped noticeably - a powerful one-two economic punch.

Predictably, the economy slowed just enough to deflate support for Democrats and - combined with a lackluster Gore candidacy - the rest, is history.

Now then, Powell does have a justification of sorts: high inflation.

But the power the Fed has to cause political mischief - to Greenspin an election, if you will - can't be ignored.

[progree]

4. Yeah, I remember "The Maestro". And the "warning lights on the dashboard" about the economy

during the 2000 election campaign.

[peppertree]

5. +1

Having grown up in the South, and having some idea of what Dubya and his gang would bring, it was painful to watch.