What happened this weeK
The market didn't like what it saw in Tuesday's CPI report, and stocks showed it! The Dow fell nearly 1300 points Tuesday. Tuesday's inflation report came in higher than expected signaling that not only is the problem of inflation not over but the path ahead for interest rates sees further drastic rates hikes. Analysts had hoped that Fed officials would consider easing their pace of interest-rate increases if data continued to show inflation subsiding but Tuesday’s report squashed any hope.
Stocks continued to fall through Friday closing as one of the worst weeks in months and traders reacted to an ugly earnings warning from FedEx about the global economy.
The Dow Jones Industrial Average dropped 139.40 points, or 0.45%, to close at 30,822.42. The S&P 500 shed 0.72% to end the week at 3,873.33. The Nasdaq Composite slid 0.90% to finish at 11,448.40. It was the worst week for the S&P 500 and Nasdaq since June.
On Friday, shares of FedEx dropped 21.4%, their worst daily drop ever. The company announced cost-cutting initiatives and withdrew their full-year profit projections citing the fact the global economy has “significantly worsened.”
Ford has committed over $50 billion to electrify its lineup with new products and the factories needed to build them, but Ford CEO Jim Farley said it is also continuing to spend on future internal combustion engine (ICE) models like the like the 2024 Ford Mustang.
"We’re investing in ICE segments where we’re dominant and where we think, as competitors leave the segments, we can actually grow," Farley told FOX Business.
"I find it intriguing that we’re portraying the future of our industry as monolithic. That’s not how it goes. That’s not how it’s going to manifest itself."
In March, Ford split its core business into the Ford Blue division, dedicated to ICE and hybrid vehicles, and the Model e division, which is focused on fully electric products. Ford has taken a different approach to its competitors, like General Motors and Volkswagen, who have committed to all-electric futures in the U.S. It has even given its dealers the option of just selling ICE models if they do not want to make the investments required to support EV sales.
Goldman Sachs is cutting its U.S. Gross Domestic Product for 2023 and sees the unemployment rate rising higher than previously expected. In a note released late Friday, Goldman lowered its expected GDP growth from 1.5% to 1.1%. Goldman now expects a 75 basis point hike at the September Fed meeting and sees a further 50 bp hikes in November and December, with the fed funds rate peaking at 4-4.25% by the end of the year.
Coming up this week:
Tues Sept 20th: Building Permits and Housing Starts numbers.
Wed Sept 21st: 2pm Federal Reserve statement and news conference with Jerome Powell - expected another significant rates hike.
Thurs Sept 22nd: Jobless claims
