CWS Market Review – September 23, 2022

“We have got to get inflation behind us. I wish there were a painless way to do that. There isn’t.” – Fed Chairman Jerome Powell

As expected, the Federal Reserve raised interest rates by 0.75% this week. This was its third 75-point rate hike in as many meetings. The target range for the overnight Fed funds rate is now 3% to 3.25%. This is the highest the Fed has had short-term rates since 2008.

Even though the rate increase was widely predicted, the stock market didn’t take the news well. On Thursday, the S&P 500 fell to its lowest point since June 17. Over the summer, the stock market gained more than 17% in just two months. In one month since then, nearly the entire summer rally has been wiped out. We can easily make another bear-market low very soon.

This week looks to be the market’s fifth weekly loss in the last six weeks. On Thursday, the S&P 500 had 123 stocks reach new 52-week lows, and only one (General Mills) made a new 52-week high. As they say on Wall Street, “it’s an ugly tape.”

In this week’s issue, we’ll take a close look at what the Fed’s move means for us and for Wall Street. I’ll also highlight the recent earnings report from FactSet. The company blew past its own forecast, but Wall Street wasn’t happy with the results. Still, I like the stock. I’ll explain what it all means.

I’ll also have some updates to our Buy List stocks. Despite the market’s rockiness, our relative performance continues to be solid. Before we get to that, though, let’s look at what Jerome Powell and his buddies at the Fed were up to this week.