During this week’s Fed Meeting, it’s very likely main interest rates will remain unchanged. But even if they don’t do anything, what these decision-makers talk about, or don’t talk about, can still affect the stock market. Currently, the Fed’s benchmark interest rate is at its highest since 2001, a result of 11 rate hikes since March 2022 aimed at curbing inflation. Despite positive signs in inflation rates nearing the 2% target, speculation arises about the Fed potentially lowering interest rates soon. Fed Chair Jerome Powell recently cautioned against premature speculation on rate cuts, emphasizing the possibility of raising rates further if inflation worsens. The Federal Reserve is in a delicate situation, acknowledging the economic slowdown resulting from increased interest rates while refraining from premature cuts. It underscores the role of effective Fed communication in combating inflation and underscores the importance of maintaining the Fed’s credibility.
GameStop (GME), the video-games retailer famous in the markets as the main “meme stock”, experienced a 10% surge following the release of third-quarter results that surpassed expectations and a shift in investment strategy. The company reported a net loss of 1 cent per share, outperforming analysts’ anticipated 8-cent loss attributed to cost-cutting measures, but also a 12.8% increase in European sales driven by improved supply chain conditions. Notably, the quarterly filing revealed that CEO Ryan Cohen would oversee GameStop’s investment plan, gaining the authority to invest the company’s cash in equities rather than just short-term debt. Despite briefly falling below the 50-moving average, GME’s share price reversed during Thursday’s trading. Let’s see what the future is planning for this strange stock and its immortal spirit.
Author: Diego Russo