Weak economic data are good news for the Fed

The US stock market dropped on Wednesday

Yesterday has been a negative day for Wall Street.

All three major indexes have closed in a loss.

The S&P 500 closed at -1.56%, the Nasdaq ended the trading session at -1.24% and the Dow Jones closed at -1.81%.

The negative movement has been driven by the latest economic data and the St. Louis Fed President James Bullard’s comment who said that the interest rate should raise above 5% “as quickly as we can”.

Lower retail sales

On Wednesday, the Department of Commerce released the latest US retail data.

The report has shown that in December retail sales fell 1.1% compared to the previous month.

Analysts have forecasted a drop of 0.8%, so retail sales have gone down more than expected.

Consumers have spent less on vehicles, gasoline and furniture.

Weak economic data are good news for the Fed

The Federal Reserve is trying to fight high inflation by implementing a restrictive monetary policy.

So far, there has been a series of interest rate hikes that have started to slow down inflation.

Yesterday’s retail sales data is the reflection of a fewer consumer demand, which is a sign that the Federal Reserve’s tightening actions are working fine to reduce inflation.

Today’s data to watch

US initial jobless claims, for the week ending 14 January, are going to be released today at 1.30 pm GMT.

Markets can be volatile.

Sentiment Indicator – Fear & Greed Index



The market sentiment is at 57 in the “Greed” mode.

The investor sentiment has changed from Fear to Greed in one month.

Portfolio Update

I am monitoring the short positions on stocks and ETFs and I will act accordingly.

This will allow my portfolio to make a profit if the market drops.

The fundamentals remain bearish, so I am neutral and cautious at the moment, based on the current FED monetary policy.

However, I am aiming to make a profit regardless of the market direction.

If you are already copying my portfolio, please keep the copy open.

If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).

Remember to copy the open trades to optimize the copy.

Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.

Thank you, everyone. Have a nice day!

Steps to follow to copy my portfolio automatically:

1. Create an eToro account here: https://federicamontella.com/go/etoro/

2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)

3. Go to my profile page: https://federicamontella.com/go/etoro-passionforprofit/

4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)

5. Enjoy, it’s all automatic. You will make passive income 24/7

Let me know if you have any questions.

 

Federica Montella

eToro Popular Investor

 

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Author: Federica Montella
eToro Popular Investor, food lover and blogger. Stock trader and Popular Investor at eToro. I am on a mission to find the best restaurants and food to eat.