{"id":670,"date":"2021-12-20T00:00:00","date_gmt":"2021-12-20T00:00:00","guid":{"rendered":"https:\/\/www.retirementrefined.com\/index.php\/2021\/12\/20\/markets-pull-back-with-one-two-punch-what-now\/"},"modified":"2021-12-20T00:00:00","modified_gmt":"2021-12-20T00:00:00","slug":"markets-pull-back-with-one-two-punch-what-now","status":"publish","type":"post","link":"https:\/\/www.retirementrefined.com\/markets-pull-back-with-one-two-punch-what-now","title":{"rendered":"Markets Pull Back with One-Two Punch! What Now?"},"content":{"rendered":"

Markets Pull Back with One-Two Punch!<\/b><\/p>\n

Last week\u2019s market reaction?\u00a0 <\/span>Federal Reserve Chairperson Powell announced a<\/b> sharp change in Fed policy<\/b>.\u00a0 <\/span>Only a few months back, rate hikes in 2022 were pretty much off the table.<\/p>\n

Last week Powell announced a doubling in the reduction of monthly bond<\/b> purchases<\/b> from 15 billion to 30 billion<\/b>, with the bond buying concluding in March.<\/p>\n

We now have 3 rate hikes forecasted in 2022 and 3 more in 2023.<\/i><\/b><\/p>\n

This is happening at a time as the uncertainties of Omicron are rather significant<\/i>.\"\"<\/p>\n

As of today, we are seeing professional sport cancellations, Broadway shows,<\/b> and others being cancelled<\/b>.\u00a0 <\/span>Many companies who were transitioning employees back into their offices, are again postponing, and having employees work from home.<\/p>\n

I certainly don\u2019t want to be redundant, however the Fed should have concluded the bond purchases several months ago.\u00a0 <\/span>If so, the narrative could be, rate hikes decisions will be currently dependent on our progress in how quickly we move through Omicron. \u00a0 <\/span>Oh well!\u00a0 <\/span>Keep in mind, Powell has changed his mind a few times during his tenure!!!<\/i><\/p>\n

With the one-two punch of Powell and Omicron, the Nasdaq led the decliners<\/b> last week, falling (2.94%)<\/b>.\u00a0 <\/span>The Dow dropped (1.67%),<\/b> the S&P 500 (1.91%)<\/b> and the Russell 2000 (1.68%).<\/b><\/p>\n

Foreign stocks were down (.46%)<\/b> and Emerging Market<\/b> stocks (1.75%).<\/b><\/p>\n

What Now?<\/b><\/p>\n

Many firms are already lowering their 2022 GDP forecast<\/b>.\u00a0 <\/span>Omicron will certainly<\/b> slow things down<\/b>.\u00a0 <\/span>How much? How long? With what significance<\/i><\/b>? Great questions? \u00a0 <\/span>The answers will have significant influence<\/b> on the Federal Reserve, the current economic recovery and of course, the markets!<\/p>\n

In addition, firms are also citing reductions in GDP projections, as President<\/strong> Biden\u2019s “Build Back Better” plan was given a sleeping pill by Senator Joe Manchin<\/b> over the weekend.\u00a0 <\/span>Many believe if the bill passed, or does pass in the future, it will contribute to economic growth, raising Gross Domestic Product.<\/p>\n

\"\"Over the last several months, I\u2019ve had conversations with clients suggesting the easy money has been made in the markets.\u00a0 <\/span>When the Fed reverses monetary stimulus, history has shown, an economic head wind appears at some point during the rate raising cycle.<\/i><\/p>\n

If you have concerns, as always, please feel free to reach out prior to your next review session.<\/i><\/b><\/p>\n

If any of your friends, neighbors, or colleagues have concerns, please feel free to have them reach out to us to schedule a complimentary consultation by clicking here<\/a>.\u00a0<\/i><\/b><\/p>\n

2022 Reminders:\u00a0<\/b><\/p>\n