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S&P 500 Loses Ground This Week Ahead Of Fed Interest Rate Decision: What Investors Need To Know

Stock Markets Dec 09, 2022 23:10
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© Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect S&P 500 Loses Ground This Week Ahead Of Fed Interest Rate Decision: What Investors Need To Know
 
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Benzinga - The S&P 500 traded lower in its worst week since September on renewed concerns over inflation and interest rates.

On Friday, the U.S. Labor Department reported a 7.4% increase in the producer price index in the month of November, down from peak growth of 11.7% in March but above economist estimates of a 7.2% gain.

Federal Reserve Chair Jerome Powell recently said the central bank could begin moderating the pace of its interest rate hikes "as soon as the December meeting," but the Fed will likely continue to tighten monetary policy in its ongoing battle with inflation.

On Thursday, the U.S. Federal Trade Commission voted three-to-one in favor of a complaint to block a $68.7-billion acquisition of video game publisher

Activision Blizzard Inc (NASDAQ: NASDAQ:ATVI) by software giant Microsoft Corp (NASDAQ: NASDAQ:MSFT).

Microsoft has insisted the buyout would not limit competition in the gaming space, but the FTC's antitrust case will now go before the commission's internal administrative law judge.

The United Auto Workers announced on Friday that employees at an Ohio electric vehicle battery plant co-owned by General Motors Company (NYSE: NYSE:GM) and LG Energy Solution voted 710-16 in favor of joining the UAW. Wages at the Ultium plant currently range from $15 to $22 per hour, below the roughly $30 per hour UAW workers earn at many U.S. factories.

On Thursday, the Pentagon announced it is splitting a six-year, $9-billion cloud computing contract four ways and awarding it to Amazon.com (NASDAQ:AMZN), Inc. (NASDAQ: AMZN), Microsoft, Oracle Corporation (NYSE: NYSE:ORCL) and Alphabet (NASDAQ:GOOGL) Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) subsidiary Google.

The U.S. Department of Defense initially awarded the contract exclusively to Microsoft back in 2018, but the deal was abandoned after Amazon alleged the Trump administration interfered with the decision-making process.

Smith & Wesson Misfires: Smith & Wesson Brands Inc (NASDAQ: SWBI) shares dropped more than 21% this week after the firearm manufacturer said falling gun demand triggered a 47% drop in revenue in the third quarter.

In the week ahead, third-quarter earnings season continues with reports from Oracle on Monday, Lennar Corp (NYSE: NYSE:LEN), Trip.com Group Ltd (NASDAQ: TCOM) on Wednesday and Adobe (NASDAQ:ADBE) Inc (NASDAQ: ADBE) on Thursday.

Analysts have lowered their earnings estimates for S&P 500 companies for the fourth quarter by 5.6% since the end of September, according to FactSet.

Economic Numbers: Following the hot PPI reading, investors will get more key economic updates on Tuesday when the U.S. Labor Department releases its November Consumer Price Index reading and on Wednesday when the Federal Reserve releases its latest interest rate decision and accompanying commentary.

Photo via Shutterstock.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

S&P 500 Loses Ground This Week Ahead Of Fed Interest Rate Decision: What Investors Need To Know
 

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Comments (1)
David Hawley
David Hawley Dec 10, 2022 6:49
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When have economist ever been right? They're always good at telling us what will happen in the future but then afterwards they tell you why it didn't. Yet stock markets hang on to their every word. A 7.4% increase in PPI instead of a forecast 7.2% increase. WOW!! A massive increase even though it's down from 11.7% last March. So the Dow plummets 300 points because economists estimates which were only an estimate anyway. How would the market react if I said I was going to spend £200 on clothes this month but then only spent £198? ffs
 
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