The S&P 500 broke a four-week winning streak this week as the latest commentary from the Federal Reserve suggests investors can expect aggressive interest rate hikes to continue.
On Wednesday, the Fed released minutes from its policy-setting meeting in July that revealed the central bank is prepared to continue raising interest rates until inflation subsides substantially. The bond market is pricing in another rate hike of at least 0.5% in September.
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On Thursday, GameStop chairman Ryan Cohen’s RC Ventures disclosed in a filing that it has unloaded its entire stake in so-called meme stock Bed Bath & Beyond. Bed Bath & Beyond shares had skyrocketed more than 350% in the past month, but they dropped 37% on Friday following the news of Cohen’s exit.
On Thursday, the National Association of Realtors reported existing U.S. home sales dropped 20.2% year-over-year in July. The national average mortgage rate on a 30-year fixed loan is around 5.5%, up from 3% at the beginning of the year.
Berkshire Hathaway filed its quarterly 13F form on Monday disclosing all the investment moves its legendary CEO, Warren Buffett, made in the second quarter. Buffett added to large stakes in Occidental Petroleum, Chevron and Apple, reduced his investments in General Motors and Kroger and exited a position in Verizon Communications.
Fleet of foot
Shares of athletic footwear retailer Foot Locker traded higher by more than 21% on Friday after the company reported a second-quarter earnings beat and announced a new CEO.
In the week ahead, second-quarter earnings season rolls on with reports from Macy’s and XPeng on Tuesday, Nvidia on Wednesday and Peloton Interactive on Thursday.
Excluding the energy sector, S&P 500 earnings are down 4% year-over-year in the second quarter, according to FactSet.
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Economic numbers
In the week ahead, investors will get key economic updates on Monday when the People’s Bank of China announces its latest interest rate decision and on Friday when Federal Reserve Chair Jerome Powell delivers a speech at the Jackson Hole Symposium.
Benzinga is a financial news and data company headquartered in Detroit.
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