Weekend Readings: This Could Cause The Next Financial Crisis

By Philippe van Doorn

Also, a preview of the Federal Reserve’s next steps to fight inflation and a painful warning from FedEx

The Federal Reserve invigorated the economy before and during the coronavirus pandemic by buying Treasuries. The central bank was the main buyer of newly issued US debt and created trillions of new dollars in the process.

The Fed is now allowing its securities portfolio to deplete as bonds mature as part of its effort to raise interest rates, cool the economy and curb inflation.

Joseph Adinolfi studies the possibility that a liquidity crisis results from the actions of the Fed.

What will the Federal Reserve decide next week?

The Federal Open Market Committee’s next policy meeting is September 20-21, followed by an interest rate decision on September 21. Led by Federal Reserve Chairman Jerome Powell, the central bank is expected to raise its federal funds rate target of at least 0.75% and accelerating the runoff from its bond portfolio, which has been a catalyst for higher long-term rates. interest rate.

As always, an important question for investors and traders is how much these stocks have already priced in. As we saw on September 13, when the S&P 500 fell 4.3%, financial markets are hypersensitive to any disappointing inflation news.

Jeffry Bartash provides an overview of next week’s actions by the Fed.

Continue reading:

What should investors do in the face of uncertainty?

Mark Hulbert offers sage advice as concerns run high.

The Meaning of FedEx’s Terrible Warning

Shares of FedEx (FDX) fell 24% on September 16 after the company warned of falling profits with slowing sales in Europe and Asia, and said it expected a deterioration of results over the next fiscal quarter.

Shares of logistics rival United Parcel Service (UPS) fell 6%, although Citigroup analyst Christian Wetherbee said UPS appeared to be holding up better than FedEx.

Analysts were shocked by the magnitude of FedEx’s warning – Barbara Kollmeyer summed up their reactions.

Tomi Kilgore examines how the FedEx stock market crash can affect the entire stock market.

Claudia Assis and Greg Robb explain why the FedEx warning is such a bad signal for the economy.

Rising rates mean you can earn a lot of interest on your money

If you keep your money in cash, you risk losing purchasing power in times of runaway inflation. Beth Pinsker explains how to get the highest interest rates while playing it safe.

Follow these easy steps to halve your risk of dementia

Most people would agree that dementia or Alzheimer’s disease is a terrible common enemy, as there is nearly a one in three chance of contracting the debilitating brain disease before death.

Brett Arends shares new research that points to a daily activity that most people can participate in that could reduce their risk of developing dementia by 50%.

Follow the Money: Guess Which Group of Senate Candidates Has the Biggest War Chest

Katie Mariner and Victor Reklaitis break a remarkable advantage for the Democratic Party when control of the US Senate is decided in November.

Is the housing market in shock as mortgage rates hit 6%?

Freddie Mac said this week that the average interest rate on 30-year mortgages had risen to 6.02%, more than double from a year ago and the highest average rate since 2008.

Mortgage applications have fallen to their lowest level since 1999. Aarthi Swaminathan shares data indicating which US housing markets are most vulnerable to falling prices.

A Different Approach to Equity Investing

Investment advisers will typically tell their clients that it is best to be diversified, holding a basket of stocks or stocks of mutual funds or exchange-traded funds to spread risk and drive the market higher. long-term.

But some wealthy people have made their fortunes by owning individual stocks for decades. Michael Brush describes a concentrated investing style that focuses on poorly valued stocks.

Related:Now’s a Great Time to Pick Up Discounted Stock. Here are 21 examples that could make you a lot of money

A Sign of the Times — The Meta Slide

Emily Bary reflects on the falling value of Meta Platforms (META), as the Facebook holding company maintains a cautious outlook amid economic uncertainty, unlike this company which had maintained a sunnier view

A ‘short’ story or three as investors bet against Apple, Tesla and other stocks

Apple (AAPL) is now the most shorted stock in terms of the dollar value of investors’ bets against the iPhone maker’s stock price. Tesla (TSLA) previously had this distinction – for more than two years.

This could be a bullish sign for Apple shares, according to Mark Hulbert.

Many more shorts: These 20 stocks have a short interest of 19% or more, and AMC and GameStop aren’t even in the top half

-Philip van Doorn

 

(END) Dow Jones Newswire

09-17-22 0920ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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