How to approach the upcoming midterms
Politics and portfolios: what the midterms mean for markets
Markets and Economy
Nationwide’s Chief of Investment Research and the Nationwide Economics team offer daily and weekly commentary and analysis of the equity and bond markets, including an overview of economic data being released, global market news, commodities and market performance by index returns. These timely insights can help you navigate markets and understand emerging trends.
Markets retest lows as pessimism surges
Market observers are searching for signs of capitulation, with equity markets retesting the June low. Equity indexes are at oversold conditions consistent with June, with only 4% of the S&P 500 companies above their 50-day moving average. There may be a light at the end of the tunnel, however, as September ends, as we enter the best seasonal quarter of the year and approach the midterm election that has historically led to strong gains over the subsequent six-month period.
Fed continues its aggressive inflation fight
The FOMC raised the fed funds rate by 75 basis points for a third consecutive meeting in September and projected even more tightening ahead than previously expected. Housing data showed a further surge in multifamily housing starts and the slowest pace for existing home sales since the Covid lockdowns.
The Fed announced a third consecutive 75 basis point rate increase as inflation trends remains hot.
The core CPI upside surprise for August highlighted the continued cost pressures across the economy as well as the long road back to a normal price environment. The Fed pushed through another 75 basis point rate hike in September while signaling further aggressive tightening ahead. But the damage may already be done as cuts in consumer activity and business spending in response to higher rates are expected to weaken growth sharply over 2023.
The Fed stays aggressive: Daily Insight from Nationwide Economics
The FOMC lifted the federal funds target range by 75 basis points for a third straight meeting, to 3.00-3.25 percent. While the post-meeting statement was virtually identical to that put out in July, the committee’s economic projections were updated to show weaker growth, higher inflation, and higher benchmark rates than had been anticipated three months ago.
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