The Clap
Inflation has been slowing down as of late in the US, with the CPI dropping by 0.1% in December 2022 compared to the month before, but investors still need to assess when should they begin investing in equities again.
What
While slowing inflation is a positive indicator for investors that the Fed will slow the pace of interest hikes, the Fed’s commitment to bringing down inflation to their desired target could potentially drive the economy into a recession, a period with minimal growth for businesses.
Many analysts have mixed opinions regarding whether the market has bottomed or not. On one hand, some analysts forecast the economy to contract in Q2 and Q3 2023. On the other hand, other expats feel that the S&P 500 may have bottomed in October 2022.
So What
The Fed is set to decrease the pace of interest rate hikes. However, investors fear that the Fed may over hike interest rates throughout the year, slowing the markets down.
Now What
Many tech companies are scheduled to announce their earnings over the coming few weeks, potentially driving markets up or dragging them down depending on their performance.
