The quarterly reporting season of 4Q22 is about to begin, being a factor that could influence the mood of the markets in the concise term. In this sense, analysts estimate that the S&P 500 companies would have experienced a 4.1% year-on-year contraction in their profits. If this figure is confirmed, it will mark the first […]
Within fundamental analysis, there are two key factors that influence the yield of a share: the earnings generated by the company and how investors value those earnings. In this context, one way to determine the value of a share is through a financial ratio known as the Price/Earnings multiple (P/E ratio). In this tutorial, we […]
Following up on the agreement reached between President Joe Biden and House Speaker Kevin McCarthy on the debt ceiling, here is an update with the relevant points: Over the weekend an agreement on the “Fiscal Responsibility Act”, which suspends the debt limit until next January 1st, 2025, was announced. The main source of budget savings […]
May 03, 2023
In line with what was expected by the market and unanimously, the FED increased the reference rate by 25bp to 5 – 5.25%. This movement represented the tenth increase since March 2022 and implied its highest level since September 2007.
Within the statement, it stood out that the Federal Open Market Committee (FOMC) reiterated that it “will closely monitor incoming information and evaluate the implications for the monetary policy.” This phrase contrasted with the words expressed in the statement in March, because it omitted a line that mentioned that the Committee “anticipates that it may be appropriate to reaffirm some additional policies (meaning, more increases in the reference rate).” This message in a certain way could insinuate a possible pause in the most aggressive cycle of interest rate rise since 1980. Under this context, the Committee expressed that it remains very attentive to inflation risks, for which reason it is committed to returning it to its 2 percent goal.
Additionally, the statement pointed towards a stance which is more dependent on emerging data, stating that “in assessing the appropriate stance for monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook.” Therefore, it would be prepared to adjust the monetary policy stance accordingly if risks arise that could prevent achieving the goals. The assessments will take into account a wide range of information, including the readings about labor market conditions, inflationary pressures and inflation expectations, and local and international financial developments.
Finally, in the middle of the turbulence that the banking system is experiencing, the statement once again highlighted that the sector is solid and resilient, although tighter credit conditions are likely to weigh on economic activity, employment, and inflation, where the extent of these effects remains uncertain.
The markets took the statement positively, as well as Jerome Powell’s statements during his press conference, emphasizing that his forecast is for modest growth and not for a recession. Also, he confirmed that the process of reducing inflation has a long way to go and that the banking conditions have “greatly improved” since March.
January 10, 2023
The quarterly reporting season of 4Q22 is about to begin, being a factor that could influence the mood of the markets in the concise term. In this sense, analysts estimate that the S&P 500 companies would have experienced a 4.1% year-on-year contraction in their profits. If this figure is confirmed, it will mark the first […]
June 06, 2023
Within fundamental analysis, there are two key factors that influence the yield of a share: the earnings generated by the company and how investors value those earnings. In this context, one way to determine the value of a share is through a financial ratio known as the Price/Earnings multiple (P/E ratio). In this tutorial, we […]
May 30, 2023
Following up on the agreement reached between President Joe Biden and House Speaker Kevin McCarthy on the debt ceiling, here is an update with the relevant points: Over the weekend an agreement on the “Fiscal Responsibility Act”, which suspends the debt limit until next January 1st, 2025, was announced. The main source of budget savings […]
