Market Volatility Continues as Investors Digest Fed’s Latest Move
The stock market experienced a rollercoaster ride on Friday, with the S&P 500 and Nasdaq closing modestly lower, while the Dow managed to eke out a small gain. This follows a tumultuous Wednesday, where the Federal Reserve’s decision to cut interest rates for the third consecutive meeting sparked a market sell-off.
Fed’s Inflation Concerns Weigh on Market
Central bankers are keeping a close eye on inflation, with Fed Chairman Jerome Powell emphasizing the need to see prices come down. New York Fed President John Williams reiterated that the Fed’s decisions are data-dependent, suggesting that future rate cuts may be fewer than anticipated.
Homebuilders Take a Hit
BTIG downgraded Lennar to hold from buy, citing concerns that the company’s strategy may lead to an oversupply of unsold homes, which could ultimately drive prices down. This is a worrying trend for homebuilders, who are already grappling with higher interest rates.
Buying Opportunities Amidst Market Turmoil
Despite the uncertainty, some investors are finding opportunities to buy into the market. Warren Buffett, for instance, went on a shopping spree in December, snapping up shares of Occidental Petroleum, Sirius XM, and VeriSign. History suggests that buying during times of market volatility can be a shrewd move.
FedEx Spins Off Truckload Business, Shares Soar
FedEx made headlines with its decision to spin off its truckload business, which is valued at about half of its publicly traded rivals XPO and Old Dominion. The move sent shares of FedEx surging 8.5%.
Nike’s Turnaround Efforts Face Challenges
Nike’s new CEO, Elliott Hill, outlined a strategy to turn around the struggling sneaker giant, but the road to recovery appears longer than expected. The company’s shares plummeted 6% after reporting a quarter that beat low expectations.
Novo Nordisk’s Obesity Treatment Falls Short
Novo Nordisk’s trial results for its next-generation obesity treatment showed a 22.7% weight loss after 68 weeks, falling short of the 25% expected. The news sent shares of the drugmaker tumbling, while rival Eli Lilly’s shares jumped more than 6%.
CVS Faces Uncertainty Amid Government Probe
A Justice Department brief against CVS alleges “unlawful” prescriptions, raising concerns about the pharmacy giant’s future. The company’s pharmacy benefit manager, Caremark, is also under scrutiny.
Government Shutdown Looms
The House is expected to vote on a temporary federal funding bill to avoid a Saturday government shutdown. President-elect Donald Trump weighed in on the issue, suggesting that a shutdown would be better under the Biden Administration than his own.
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