Equities had their worst-performing week since October. Investors are digesting the latest readings on inflation, particularly the producer price index (PPI) which came in hotter than expected. With valuations as extended as they are, any news that adds a risk premium will be a reason to sell.
But is this the start of a deeper correction? Probably not. The Federal Reserve is still likely to cut interest rates by 25 basis points next week. However, resurging inflation will dampen expectations for future rate cuts, and investors have to price that into stocks.
On the other hand, if the Federal Reserve maintains interest rates at a higher level, it’s because the economy and the consumer remain healthy. The end of the year is always a time for profit-taking, tax-loss harvesting, and other rebalancing strategies. However, the trend for the market is still likely to be higher in 2025. MarketBeat analysts are here to help you find opportunities for your portfolio. Here are some of our most popular articles for this week.
