Mid-Week Market Minute 01.26.22

Market Updates

U.S. stocks traded lower in another volatile week as investors grappled with uncertainty regarding monetary policy, the economic growth outlook, and escalating geopolitical tension. On Wednesday afternoon, the Federal Reserve’s two-day policy meeting concludes with a policy decision due out at 1 p.m. Central, followed by comments from Fed Chair Jerome Powell. While no immediate policy changes are expected, markets are anticipating the central bank to point towards the first rate-hike in March of this year. In addition, market participants will be looking for clarity surrounding reduction of the Federal Reserve’s massive $8.9 trillion balance sheet once asset tapering has been completed. Markets have been volatile going into the Fed decision, with Russia-Ukraine tensions adding to concerns. Today, markets will likely focus on how aggressive the Fed’s guidance will be to fight inflation, both in terms of interest-rate hikes expected this year, as well as reduction of the balance sheet.  Looking forward, we have the first estimate of fourth-quarter GDP on Thursday, with the consensus growth expected to be 5.7%.  Friday, personal income and outlays will be reported, with the key PCE price index expected to rise 5.8% year-over-year (core 4.8%).  Both these reports will give markets insight into growth and inflation as we move forward in the year.

Source: GSAM, Daily Upside, JPM, Factor Investor

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Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results.

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