Growth stocks led a rebound in Wall Street’s main indexes on Friday in a week beset by worries aboutrampant U.S. inflation the worsening outlook for economic growth, while Twitter sank after Elon Musk put his deal for the social media company “temporarily on hold.”
Growth stocks Microsoft Corp, Apple Inc, Google-owner Alphabet Inc, Amazon.com and Nvidia Corp gained between 3.2% and 9.4% after falling for most of the week.
U.S. stocks have swung wildly this week on fears that the Ukraine war, surging inflation, COVID-19 lockdowns in China and a hawkish Federal Reserve policy could spark a global economic slowdown.
Fed Chair Jerome Powell repeated on Thursday his expectation that the central bank will raise interest rates by half a percentage point at each of its next two policy meetings while pledging that “we’re prepared to do more” if data turns the wrong way.
Twitter Inc was among the biggest losers, slumping 8.1% after Tesla chief Elon Musk said the $44-billion deal to buy the micro-blogging platform was “temporarily on hold” even though he said he is committed to the acquisition.
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
MacDailyNews Take: The current U.S. Fed is painfully reactive and woefully late. A well-educated high school student could’ve handled inflation better than the ball-less Jerome Powell who’s stuck perpetually in catch-up mode and falling further behind, like some scrub last place lane-filler chasing Usain Bolt.
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
Earlier this year, Interactive Brokers founder Thomas Peterffy said, “Inflation is 7% — 1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. – Ronald Reagan
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