Markets close out week lower more interest rate hikes next year

It was a tale of two halves this week, with stocks rising at the start of the week before reversing course Wednesday afternoon on hawkish sentiment from the Federal Reserve. As expected, the central bank raised interest rates by 50 basis points, taking the overnight borrowing rate to a targeted range between 4.25% and 4.5%. But what irked markets was Fed Chair Jerome Powell’s indication the Fed could continue to raise rates for longer to bring inflation under control. The S & P 500 lost around 2.25% for the week, closing out Friday down more than 1%. At the same time, the US government released its monthly consumer price index (CPI) this week, showing prices rose at a slower rate than forecast for November, a further sign inflation may have peaked. But even with increasing data points showing inflation is easing, we think the Fed could continue to raise rates to 5.5% next year. The central bank needs to see inflation not only slow but retreat, with a reduction in wage inflation paramount to the Fed being able to loosen monetary policy. Under the hood, the consumer discretionary sector led to the downside this week, followed by financials and technology. Energy was the only sector to close higher for the week. Meanwhile, the US dollar index is holding just under the 105 level. The price of gold remains at about $1,800 per ounce. West Texas Intermediate (WTI) crude prices are hovering just above $74 a barrel, while the yield on the 10-year Treasury stands at around 3.5%. Looking back No companies in the portfolio reported earnings this week. On the macroeconomic front: Consumers pulled back on spending in November, with retail sales down 0.6% , the US Labor Department reported Thursday. That was a steeper decline than the 0.3% predicted by Wall Street. Also on Thursday, the Fed released data showing that US factory production declined for the time since June, by 0.2%. Initial jobless claims for the week ending Dec. 10 came in at 211,000, a decrease of 20,000 from the prior week and below expectations of 232,000. What’s ahead Earnings season is winding down and no Club holdings will be reporting next week. Here are some other earnings reports and economic numbers to watch in the week ahead: Monday, Dec. 19 After the bell: Heico Corp (HEI), Steelcase (SCS) Tuesday, Dec. 20 Before the bell: General Mills (GIS), FactSet (FDS), Embecta (EMBC) After the bell: Nike (NKE), FedEx (FDX), Worthington Industries (WOR), CalAmp (CAMP), BlackBerry (BB), AAR Corp (AIR) 8:30 a.m. ET: Housing starts Wednesday, Dec. 21 Before the bell: Carnival (CCL), Cintas (CTAS), Rite Aid (RAD), Toro Co (TTC) After the bell: Micron (MU), MillerKnoll (MLKN) 10:00 a.m. ET: Existing home sales Thursday, Dec. 22 Before the bell: Paychex (PAYX), CarMax (KMX), Apogee Enterprises (APOG) After the bell: Mission Produce (AVO) 8:30 a.m. ET: Initial jobless claims 8:30 a.m. ET: Gross domestic price Friday, Dec. . 23 8:30 am ET: Durable goods orders 8:30 am ET: Personal spending & income 10:00 am ET: New home sales (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. The Federal Reserve building is seen before the Federal Reserve board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, January 26, 2022. Joshua Roberts | ReutersIt was a tale of two halves this week, with stocks rising at the start of the week before reversing course Wednesday afternoon on hawkish sentiment from the Federal Reserve.

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