The US central bank should be cautious
- 12 April 2023
- Posted by: Federica Montella
- Categories: eToro CopyTrader, Investing
The US stock market finished mixed yesterday
Tuesday has been a positive day only for the Dow Jones, among the three big US indexes.
The S&P 500 finished flat at 0.0%, the Nasdaq ended the trading session at -0.43% and the Dow Jones closed at +0.29%.
Yesterday, the stock market has not moved much because investors are waiting for inflation data.
The investors’ sentiment is Greed, as indicated in the graph below:
Sentiment indicator – Fear & Greed Index
The market sentiment is 60, in “Greed” mode. Last week the sentiment was Neutral, so it is improving.
The US central bank should be cautious
Yesterday, Chicago Fed President Austan Goolsbee has spoken about the next monetary policy action and he said“At moments like this of financial stress, the right monetary approach calls for prudence and patience”
His view is important because, this year, he has voting rights.
The next Federal Reserve meeting will be in early May and the majority of investors (more than 70%) are expecting an interest rate increase of 25 basis points, according to CME FedWhatchTool.
What to watch today
All eyes are on the Bureau of Labor Statistics report about the March US consumer price index which will be released today at 13:30 GMT.
The CPI for March is expected to increase by 0.2% from the previous month, and a 5.2% increase year over year, both data are down from February’s 0.4% and 6%, respectively.
The Fed’s final decision regarding the next monetary policy action will be for sure influenced by the above data.
Today at 19:00 GMT, the Federal Open Market Committee (FOMC) will publish its February Meeting Minutes when the decision to hike the interest rate by 0.25% was taken. The report will help us to understand the reasons why has been taken that decision in the middle of a banking crisis.
The stock market could volatile today.
Portfolio update
I remain neutral and cautious about the stock market since the trend is not clearly defined.
I hold long and short stock positions and aim to profit regardless of the market direction.
If you are already copying my portfolio, please keep the copy open.
If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).
Remember to copy the open trades to optimize the copy.
Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.
Thank you, everyone. Have a nice day!
Steps to follow to copy my portfolio automatically:
1. Create an eToro account here: https://federicamontella.com/go/etoro/
2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)
3. Go to my profile page: https://federicamontella.com/go/etoro-passionforprofit/
4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)
5. Enjoy, it’s all automatic. You will make passive income 24/7
Let me know if you have any questions.
Federica Montella
eToro Popular Investor
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