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1. The Dow Jones Industrial Average closed 0.18% lower today as the market began to recover from a Tuesday sell-off triggered by hawkish comments during Fed Chair Jerome Powell's Senate testimony. Both the S&P 500 and the NASDAQ Composite saw a slight bump, closing 0.14% and 0.4% higher, respectively. Q: Will the stock market close the week in the green? Let us know what you think at Inside.com. |
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2. On Tuesday, Fed Chair Jerome Powell cautioned that the central bank could likely raise interest rates higher than expected, with CME futures pricing indicating that rates will reach the 5.5%-5.7% range. At its December meeting, the FOMC set a "terminal rate" of 5.1%, but subsequent economic data has "come in stronger than expected," according to Powell. Q: Will the Fed raise its targeted range to 5.5%-5.7% this year? Tell us what you think at Inside.com. |
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3. Job openings declined by 410,000 from December to 10.824 million in January, per the Department of Labor's latest Job Openings and Labor Turnover Summary. Jerome Powell has called the jobs market "extremely tight," pointing to low unemployment as evidence of a resurgence in inflation. |
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4. While the Fed is hinting at further rate hikes, BlackRock is preparing for the worst, with the investment firm's CIO Rick Rieder predicting the federal funds rate will reach 6% and stay there for an "extended period" to get inflation back to the central bank's target of 2%. Rieder warned that controlling inflation has become more complicated as "today's economy is no longer as interest-rate sensitive as that of past decades." Morgan Stanley echoed BlackRock's sentiment, predicting a return to the more aggressive half-point rate hikes the Fed used in 2022. |
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5. Tesla shares fell more than 3% on Wednesday after a Berenberg analyst downgraded the company from "buy" to "hold." The drop in stock price follows the opening of a National Highway Traffic Safety Administration investigation into detaching steering wheels in the Model Y and a highly publicized Twitter exchange between Tesla CEO Elon Musk and a disabled Twitter employee on Tuesday. |
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6. Stitch Fix had a tough Wednesday after reporting a 20% YoY decline in sales for its fiscal second quarter and the departure of its CFO, Dan Jedda, who is taking over the finance role at Roku. Shares of Stich Fix fell around 10%, bringing their decline over the past year to nearly 60%. |
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7. On Tuesday, Starbucks CEO Howard Schultz agreed to testify in a Senate hearing on the company's alleged union-busting, a day before the Health, Education, Labor, and Pensions committee scheduled to vote on subpoenaing him. Starbucks stock has fallen 3% since Tuesday morning. |
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