US ECONOMY

This year, traders and investors on Wall Street will pay close attention to figure out whether rising bond yields and China's woes will give the Fed a good reason for a dovish message — a pause in interest rate hikes in fighting inflation.

The S&P 500 ended last week with 90 points or a 2% loss, the Dow Jones with 1200 or a 3.4% loss, and the tech-heavy Nasdaq with 337 points or a 2.5% loss.

When bond yields rise, the opportunity cost of capital committed to equities rises, and therefore, the expected return on equities decreases. As a result, equities command lower valuations.

Twelve months ago, Wall Street was trading on the narrative that the U.S. economy will slide into a full-blown recession for the rest of the year.

The latest U.S. jobs report is a mix of positive and negative news as the national economy tries to achieve a so-called soft landing.

Fitch Ratings is sending a warning to the United States federal government that its current spending and borrowing habits cannot continue without serious consequences for the national and international economy.

The Bureau of Labor Statistics (BLS) will release the July nonfarm payrolls report on Friday morning. It's a survey of private business establishments in the country measuring the net number of jobs generated monthly.

Americans are feeling better about their economic situation, according to two key metrics of consumer confidence.

A stronger-than-expected U.S. GDP report and robust durable goods sales shook off fears of an impending recession, aiding the positive sentiment about corporate earnings.

The U.S. housing market is stabilizing in 2023 after rapid price increases in the post-pandemic years, but the demand for homes still significantly exceeds the supply.

The chances for another hike have been rising thanks to a robust labor market, something the Fed monitors closely in determining the direction of the nation's monetary policy.

The labor market's resilience supports expectations for a hawkish Fed, meaning Wall Street is in for higher interest rates for extended periods.

In its regular June meeting last week, the Fed sent a clear and loud message to markets: Fighting inflation isn't done. Interest rate hikes will continue for the rest of the year until inflation reaches the official goal of 2%.

In its regular June policy meeting on Wednesday, the FOMC left interest rates unchanged. Nonetheless, it reaffirmed that price stability remained its top priority goal and that it would do whatever it takes to reach it.

That's a new dilemma the nation's bank is facing as the U.S. economy has moved closer to its dual pursuit of maximum employment and steady prices.

Kiyosaki said gold, silver and Bitcoin are the best hedge against the incoming crash.

The U.S. economy continues to churn out more jobs at a healthy rate, according to the U.S. Bureau of Labor Statistics.

On Wednesday afternoon, the nation's central bank announced another rise in the Federal Funds Rate by 25 basis points and pledged more hikes if needed to achieve price stability, meaning bringing inflation to the official target of 2%.

The Fed's decision Wednesday is the 10th rate hike in a span of 14 months.

Compounding the Fed's dilemma is a wave of regional bank failures, which raises the prospect of a credit crunch that could further limit liquidity and push a weakening economy into a recession.

"The implications for earnings are not great news: the Financials sector is still expected to drive earnings growth in 2023," Amanda Agati, chief investment officer at PNC Asset Management Group, said.

Barry Sternlicht has thrown jabs at the Fed over the past months, calling out the government's methods in reporting rental data.

Home prices reportedly lagged inflation by 2.5% between July 2022 and January 2023.

The easing of inflation comes at a time when higher interest rates have begun to take their toll on the nation's regional banks.

Fighting the Fed is a bad idea on Wall Street. It can be harmful to traders and investors who do just that.

The Federal Reserve once again raised interest rates by 25 bps during its meeting on Wednesday with FOMC chair Jerome Powell noting that "we no longer expect that ongoing rate increases will be appropriate."

Traders and investors were encouraged by comments made by U.S. Treasury Secretary Janet Yellen, reassuring bankers that regulators are prepared to protect depositors of smaller U.S. banks.

FedEx, Rivian and REI saced hundreds of employees, citing profitability and consumer demands.

The easing of supply chain constraints has begun to put downward pressure on prices on the economy's supply side.