Tencent securities FRANCISCO, March 20 morning news, according to market watchers US financial website reported that the stock market investors this week, the Fed once again become the focus of their attention, at least briefly back in the spotlight again recently Investors have been immersed in the tariffs from steel and aluminum concern with the White House and among the political chaos。 The Fed will hold on Tuesday began a two-day monetary policy meeting and policy statement on Wednesday。
Market is widely expected Fed rate hikes will open in 2018 at the conference, which will be to raise interest rates for the first time under the new term Fed Chairman Jerome Powell 1 rule。
Investors eager to know him in the end "inherited" the former Fed Chairman Janet Yellen's "legacy"。 In February, Powell officially took over as Fed chairman Yellen new term。 Although the pricing of market participants show that they almost fully convinced that the Fed will raise interest rates by 25 basis points in the afternoon (two in the morning Beijing time Thursday) on Wednesday, but investors will be carefully analyzed Fed's policy statement will be released, and a press conference after Powell。
"We want to see if what he is doing for accident。
In general, however, whether Powell, or anything else that a Fed chairman did not want to lead the market turmoil。
"Senior portfolio manager at TCW Diane Jaffe (DianeJaffee) said.。
Federal funds rate futures market expects the Fed will raise interest rates three times to the end of the year, but to raise interest rates four times in the probability of more than 30%。
So far this year, the S & P 500 index rose%, but still from a record high the index has% gap in the January 26 closing hit。
As of last Friday's close, the S & P 500 index appears weekly decline, but compared to the case of the index earlier in February fell 10 percent rebound。 On Friday, the S & P 500 index closed slightly higher, reporting points。 But investors still continue to maintain a certain optimism, expressed Jaffe。
"Last week's data on consumer confidence and factory orders and non-farm employment report showed the US economy continues to grow。
If the US economy continues to improve it, then the Fed to raise interest rates three times or four times what it is not a problem, and some in the industry as the market tends to perform better than other industries。
"Indeed, the 2018 market performance has proved that investors look to US interest rates accompanied by rising inflation fears and not too strong。
US 10-year bond yields remained at levels below 3%, a level considered moderate performance。
US stock market sell-off in February, triggering factor is investor after the US January non-farm payrolls report on fears of higher inflation, because at that time the data show that the United States is on the rise in wage pressures。
US stocks rebounded subsequently, because of economic data showed inflation still does not rise too fast。
Market forecast what will happen is a very difficult thing to do in the next twelve months, but in an environment of rising interest rates under some of the industry's stock liquidity destined better than others, expressed Jaffe。 "As long as banks can continue to lend, and by means of the spread between lending rates and lending rates and profits, then the bank would have to be profitable。
Of course, if interest rates rise too fast, curbed demand of the market, then this cycle will end。 "Jaffe said.。
In the past 12 months, the S & P 500 financial sector index has risen 17 percent, slightly better performance than the broader market rose%。
"Tech sector has shown that no matter at what stage of the economic cycle, the plates are able to achieve organic growth。 If the US gross domestic product (GDP) growth rate to reach the 3% level, the industrial sector and basic materials sector stocks are still able to make a profit, up 50%。
"According to the Atlanta Fed GDPNow track model of the US economy in the first quarter of this year it is expected to expand at a rate of percent, which would be twice the average growth rate during the US economic recovery。
But higher interest rates may still have some of the alternatives to be considered bonds (bondproxies) industry stocks have a negative impact, for example, utility stocks, telecoms and consumer stocks essentials。 These industry stock performance has been less than the broader market, and this situation in the next period of time will still continue, Jaffe expressed。 Since the beginning of this year, telecom stocks, utility stocks and consumer stocks fell in necessities% to% range。 "Under such market environment, if there is no basis to achieve growth, then, utility stocks and telecommunications stocks they want to grow quite difficult。
"Jaffe said.。 US Federal Open Market Committee (FOMC) two-day monetary policy meeting will end on Wednesday, the policy decision will be announced at 2 pm EST Wednesday。
Subsequently, EST Wednesday 2:30 pm Fed Chairman Powell will hold its first press conference。 In addition to the US Federal Open Market Committee, investors will focus in February of existing and new home sales data and durable goods orders data。
(Yuet Wah)。