Morning News:Focus on the Russia-Ukraine situation! U.S. stock volatility risk reignites via /r/wallstreetbets #stocks #wallstreetbets #investing


Morning News:Focus on the Russia-Ukraine situation! U.S. stock volatility risk reignites

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Democratic Senator Joe Manchin Urges Fed to Face Inflation and Stop “Cowering”

The Federal Reserve needs to “stop shying away” and “tackle inflation head-on,” said Democratic Sen. Joe Manchin (D-W.Va.), who reiterated his call for the Fed to act to combat the fastest rate of price increases since the early 1980s.

“Inflation should keep everyone on high alert right now,” and “the market can’t afford it. You can’t keep pouring gasoline on the fire. You just can’t do it.” Manchin said.

Manchin has been warning for months about the impact of U.S. government spending on inflation. Last December, he suspended talks with President Joe Biden on plans to expand social programs and tax increases, citing rising prices.

U.S. House Speaker Nancy Pelosi (D-Calif.) said on a television program Sunday that rising prices should be weighed against job growth and President Biden’s efforts to mitigate the effects of the new crown epidemic through federal spending. While it’s important to address inflation, “it’s not right to say that what we’re doing is having an impact on inflation.

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Goldman Sachs continues to expect S&P growth but cuts target, forecasts seven rate hikes this year

Goldman Sachs Group Inc. strategists lowered their expectations for U.S. stock market returns this year as the prospect of more aggressive monetary tightening puts pressure on valuations.

The strategists lowered their year-end target for the S&P 500 benchmark index to 4,900 points from 5,100 points. The index closed at 4,418.64 points on Friday.

Despite the less optimistic outlook, it still implies the economy will rise 11 percent from current levels to a record high, though the strategists warned of greater downside risks.

“The macro backdrop is more challenging this year than in 2021,” wrote the team, led by David Kostin, “with uncertainty about the path of inflation and Federal Reserve policy. “

The U.S. stock market started the year at a disadvantage as the Fed prepared to close the floodgates of abundant liquidity. It was the abundant liquidity that drove the strong rally in stocks after the outbreak.

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Soros Spends $10 Billion in Q4 on Tesla’s ‘Mystery Foe’ Rivian

According to Soros Fund Management’s 13F filing with the U.S. Securities and Exchange Commission (SEC), the fund managed by billionaire George Soros purchased nearly 20 million shares of Rivian in the fourth quarter of last year, with a market value of about $2.057 billion, or 12.7 billion yuan, accounting for nearly 30% of its portfolio. The company is the largest long position in Rivian.

Overall, Soros also purchased short options on Kingmaker’s Nasdaq 100 Index Fund (QQQ), indicating a bearish stance on technology stocks. He also reduced his holdings in Liberty Broadband-C, Horton Housing, Amazon and others.

Meanwhile, Amazon.com owns 20% of Rivian, which is expected to provide Amazon with more than 100,000 electric trucks. Some customers argue that “Rivian has a real product and is actually delivering it in production, whereas Lucid does not have full delivery capability at this time. Given Amazon’s investment in Rivian, this is hard to ignore.”

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Saudi Arabia announced that it has transferred a 4% stake in Saudi Aramco to the Saudi Public Investment Fund

Saudi Arabia announced that the Saudi government will transfer a 4% stake in Saudi Aramco to the Saudi Arabian Sovereign Wealth Fund (PIF), with a market value of $80 billion.

PIF said the transfer from the government will “strengthen the fund’s strong financial position and high credit rating in the medium term,” adding that the fund “relies on the value of its assets and the returns on its assets under management to develop its funding strategy.”

The deal with Saudi Aramco, which essentially transfers an asset from one pocket of the government to another, is the latest move to boost the fund’s assets, which received its first credit rating this month after the fund received billions of dollars from the central bank’s reserves and free land for development projects.

After the transfer, the Saudi government remains the largest shareholder in Saudi Aramco, with a 94 percent interest, and PIF’s assets under management will increase to help reach its target of more than 4 trillion riyals ($1.07 trillion) in assets by 2025.

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Fed’s Daly warns: rate hikes too fast will backfire, should take a “measured” approach

Mary Daly, president of the San Francisco Fed, said that an overly aggressive pace of interest rate hikes would prevent the Fed from reaching its original policy goals.

Daly admitted in an interview, according to economic data, the Fed has to contract quantitative easing measures, but according to past experience, if the Fed’s policy shift is too aggressive and brutal, the effect will be counterproductive, will make the pace of economic growth becomes unstable, while endangering the Fed’s price stability goals. “The most important thing is to measure with our pace, and more importantly to rely on data,” Daly added.

The Fed is gradually reducing asset purchases during the epidemic and is preparing to raise interest rates to fight inflation. The U.S. CPI rose 7.5 percent in January from a year earlier, the fastest rate of growth since 1982.

Market participants expect the Fed to raise interest rates for the first time at its March policy meeting.

Daly’s statement implies that she is not in favor of the Fed raising rates by 0.5 percentage points in March, “I’m not in favor of taking action in March, we should look very carefully, measure the future, and then make the next rate increase at what seems like the best time. That could be at the next meeting, or it could be at another meeting.”

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U.S. Investors Expect More Volatility Ahead, Along With Market Fears Over Russia-Ukraine Situation

Geopolitical concerns have added another layer of volatility to already volatile markets as investors digest the possibility of an escalating conflict between Russia and Ukraine, though some suspect the issue will drag down U.S. asset prices in the longer term. Reports of rising tensions between the two countries weighed on stocks on Friday, pushing up the prices of U.S. bonds, the dollar and other safe-haven assets. The Federal Reserve’s hawkish stance has already unnerved investors.

President Joseph Biden spoke with Russian President Vladimir Putin on 12 December after the U.S. government claimed that Russia could “invade” Ukraine “at any time” within days, according to Globes. The two men spoke for about an hour. The media commented that the call did not lead to a breakthrough. Russian officials on the same day accused the U.S. of “hysterically” playing up the alleged Russian “planned invasion” of Ukraine.

Despite market volatility, some investors are skeptical that a more serious conflict will drag down the broader market in the longer term.

Submitted February 14, 2022 at 08:21AM by abigaillv700
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