Investors are scouring every word from Federal Reserve Chairman Jerome Powell for clues about where interest rates are headed. Technology stocks fell sharply on Wednesday after Powell indicated during a House hearing that the central bank is likely to continue raising interest rates in the coming months, albeit at a slower pace.
“Given how far we’ve come, it may make sense to raise rates, but at a more moderate pace,” Powell said.
Streetwise columnist James Mackintosh argues that this may be too superficial a read, at least for long-term investors. Rarely should investors care what the Fed says or even does at its meetings. Long-term returns depend on getting the overall direction of the economy and interest rates right, and the Fed’s fine-tuning is missing the mark, he argues.
Bitcoin has surged, surpassing $30,000 for the first time since April. Analysts pointed to recent moves by traditional financial firms to enter the crypto market. For example, BlackRock has filed with the Securities and Exchange Commission for a spot Bitcoin exchange-traded fund.
Betting that BlackRock’s Bitcoin exchange-traded fund application will be approved might be foolhardy given the way regulators are thinking, but a nod when it came to it would have electrifying implications for the beleaguered asset class, says Heard on the Street columnist Telis demos. The Securities and Exchange Commission has so far rejected a number of applications for ETFs that would own Bitcoin.
Shares of Volkswagen fell about 1% after the company set new targets, including an operating margin of 9% to 11% by 2030. Last year, the margin was 8.1%, supported by high vehicle prices. This is a company that only cares about results — especially now that it’s up against electric giants Tesla and BYD, says Heard on the Street columnist Stephen Wilmot.
Share prices were mostly in the red, with shares of large technology companies weighing on the markets. The tech-heavy Nasdaq Composite fell 1.2%, while the S&P 500 fell 0.5%. The Dow Jones Industrial Average fell 0.3%, or 102 points.
This analysis comes from the journal’s Heard on the Street team. Subscribe to the free daily afternoon newsletter here.