This week ahead || 18 Sept - 22 Sept 2022
NEWS
The stock market is not the economy in an important way
According to FactSet, S&P 500 companies generate around 40% of revenue outside of the U.S. That means these companies are significantly dependent on the health of the international economies in which they operate. They employ abroad, source goods abroad, and sell abroad.
This is not to say the U.S. economy is totally decoupled from the rest of the world: Annual exports account for $3 trillion of the $25 trillion worth of U.S. GDP.
Read about it here.
Fed Tilts Toward Third 75 Basis-Point Hike on Stubborn Inflation
Federal Reserve officials are on track to raise interest rates by 75 basis points for the third consecutive meeting this week and signal they’re heading above 4% and will then go on hold.
A case can be made for going even bigger. But there are persuasive arguments for not delivering a shock 100 basis-point increase that will probably prevail when they gather Tuesday and Wednesday in Washington.
Read about it here.
Costco Stock Hit By Sellers Ahead Of Quarterly Earnings Report; FedEx Warns, Shares Dive
Investors sent shares of FedEx (FDX) sharply lower Friday when the company pre-announced weak earnings and sales. CEO CEO Raj Subramaniam said he expects the economy to enter a "worldwide recession." Wall Street will be hoping for a different tune from retail stocks like Costco (COST) and Darden Restaurants (DRI) ahead of upcoming earnings reports.
Read about it here.
Stanley Druckenmiller says the Fed is like a 'reformed smoker,' while Jeff Gundlach warns it's driving the US into a dumpster.
A surprisingly hot US inflation number has galvanized Wall Street into taking stock of the Federal Reserve's efforts to cool it — and some investors aren't holding back.
The inflation shock last week has cemented in the view the Fed will raise interest rates by at least 75 basis points at its meeting next week.But it will mean yet another oversized increase from the central bank for its fifth rate hike this year.
Read about it here.