This Is Why Market Watchers Are Saying It’s ‘Hell Week’

By Mike Degen Mike Degen has been verified by Muck Rack's editorial team
Published on March 7, 2023

Pundits are calling it “Hell Week” on Wall Street for a variety of factors. The market is coming off a slump in February, with the S&P dropping 2.61% after gaining 6.18% in January.

Some claim that the 2023 market rally might be over, even though it’s only March. David Kelly, the chief global strategist at JPMorgan Asset Management, predicts “2023 will be a difficult year for corporate profits,” which foreshadows low earnings growth.

Much of the market uncertainty is tied to inflation and the Fed’s efforts to combat it through interest rate hikes. Over the past year, interest rates have risen from zero to 4.5%, one of the sharpest hikes in history. Fed chair Jerome Powell has indicated that the Fed will continue to raise rates until inflation cools. It’s taking longer than expected. This goes against previous optimism that rate hikes would slow down.

Despite the Fed’s increases, the labor market is strong. Over 500,000 jobs were added in January alone, and unemployment is at its lowest level in over 50 years. More data is coming out this week, with ADP’s private payroll report and the JOLTS job report coming out Wednesday. This is followed by the Labor Department’s monthly report on Friday.

Much of the market is also eying Chairman Powell : Credit: Tom williamsin front of the Senate Banking Committee on Tuesday, followed by his appearance at the House Financial Services Committee on Wednesday. Many expect him to stand by his inflation target of 2% and the need for further rate hikes.

On Thursday, President Biden will present his annual budget to Congress. There’s an expected showdown on the debt ceiling, with Republicans calling for it to halt. The debt ceiling needs to be raised by the summer, or else the US will default on some of its payments.

By Mike Degen Mike Degen has been verified by Muck Rack's editorial team

Mike Degen is a contributor at Grit Daily. His interests include business, technology, and policy. He also writes on Substack and Twtitter and can be contacted @mikedegenwrites

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