What expected stock market in this week-
This week, Oil and other commodity prices soared as the U.S. announced it would impose sanctions on Russian energy imports, and President Biden called for an end to Russias most favoured nation trading status, As a result, the average gas prices in the US have hit a new record high। With this rapid rise in prices, there could be even more inflation in store for US consumers, the Bureau of Labor Statistics (BLS) said, adding that the February index of consumer inflation rallied prices to a 40-year high.
Against this background, the Federal Reserve is expected to raise interest rates at a two-day Federal Open Market Committee (FOMC) meeting beginning Tuesday, and although Fed Chairman Jerome Powell had previously said he would support a quarter-percent-point rate. "The central bank will closely monitor the effects of development in Ukraine," he said. Investor producers can also expect inflation data, retail sales data, and major updates on the U.S. housing market.
Asset Class Total Returns by Year-by-Date-
- Oil +44.5%
- Comodities +38.3%
- Gold +5.8%
- Dollar +2.4%
- Cash 0%
- Government Bonds -4.1%
- High Yield Corporate Bonds -6.9%
- Investment Grade Corporate Bonds -7.2%
- Stocks -10.7%
- Bitcoin -14.1%
Increase in rates-
The much-awaited policy meeting of the FOMC begins on Tuesday with a press conference on Wednesday। In comments earlier this month, Fed Chairman Jerome Powell took the unusual step of saying before the meeting that he would support a 25-basis-point rate hike to tackle inflation. However, the expansion of sanctions and other economic penalties against Russia is likely to increase pressure on prices, and central bankers will have to weigh the risks of rising inflation with the prospect of a rapid economic slowdown if rates are raised too soon.
Producer prices-
BLS will release its February Producer Price Index (PPI) on Tuesday, and we will find out if prices for producers have also gone up as they did for consumers। The consensus estimates for monthly growth of 0.9% and year-on-year growth of 9.7% to 10% in January. Earlier this week, BLS said its consumer price index (CPI) rose 7.9% year-on-year in February, the highest since 1982. Some economists are speculating that this rate could be close to 9% for March.
Slow sales-
The U.S. Census Bureau will release its February retail sales report on Wednesday, which is expected to show a dramatic decline in sales growth last month with an increase of only 0.4%, with an increase of 3.8% in January. Sales are expected to rise 1%, except for auto, compared to a 3.3% jump in January, as consumers retreat in response to higher prices. On Friday, the University of Michigan reported that its consumer sentiment index had fallen to its lowest level since 2011, as inflation expectations reached a 41-year high.

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