Stock-market investors fear ‘no-landing’ economy could spell trouble. What’s next.

by | Feb 4, 2024 | Stock Market

While the U.S. stock market has been pricing in a “soft-landing” scenario for the economy, a blowout January jobs report, relatively strong corporate earnings, and Federal Reserve Jerome Powell’s comments during the past week could point to the possibility of “no landing,” where the economy is resilient while inflation stays target.   Such a scenario could still be positive for U.S. stocks, as long as inflation remains steady, according to Richard Flax, chief investment officer at Moneyfarm. However, if inflation reaccelerates, the Fed may be hesitant to cut its policy interest rate much, which could spell trouble, Flax said in a call. 

What the past week tells us Investors have just gone through the busiest week so far this year for economic data and corporate earnings reports, with stocks ending at or near their record highs. The Dow Jones Industrial Average
DJIA
finished the week with its nineth record close of 2024, according to Dow Jones Market Data. The S&P 500 index
SPX
scored its seventh record close this year on Friday, while the Nasdaq Composite
COMP
is about 2.7% lower from its peak. The Fed kept its policy interest rate unchanged …

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[mwai_chat context=”Let’s have a discussion about this article:nnWhile the U.S. stock market has been pricing in a “soft-landing” scenario for the economy, a blowout January jobs report, relatively strong corporate earnings, and Federal Reserve Jerome Powell’s comments during the past week could point to the possibility of “no landing,” where the economy is resilient while inflation stays target.   Such a scenario could still be positive for U.S. stocks, as long as inflation remains steady, according to Richard Flax, chief investment officer at Moneyfarm. However, if inflation reaccelerates, the Fed may be hesitant to cut its policy interest rate much, which could spell trouble, Flax said in a call. 

What the past week tells us Investors have just gone through the busiest week so far this year for economic data and corporate earnings reports, with stocks ending at or near their record highs. The Dow Jones Industrial Average
DJIA
finished the week with its nineth record close of 2024, according to Dow Jones Market Data. The S&P 500 index
SPX
scored its seventh record close this year on Friday, while the Nasdaq Composite
COMP
is about 2.7% lower from its peak. The Fed kept its policy interest rate unchanged …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]

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