Market update: Rate hikes on hold (for now)

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This week in the markets

  • The Federal Open Market Committee (FOMC) released reports on Wednesday that signaled a pause on rate hikes, due to uncertainties about global growth and the US economy.
  • The Standard and Poor’s 500 Index (S&P 500) celebrated five days of wins on Thursday, which was its longest winning streak since mid-September.
  • This week, Amazon announced plans to use machine learning to deliver to your doorstep product samples it thinks you want.

The Federal Reserve pauses rate hikes

On Wednesday, the FOMC released minutes from its December meeting, in which the final rate hike of 2018 was approved. The FOMC has eight regularly scheduled meetings per year and publishes minutes about three weeks thereafter. December’s minutes showed that some officials were reluctant to increase rates last month due to a lack of inflationary pressure, which refers to pressure that can cause a rise in general price levels of products and services. The FOMC also hinted that the Federal Reserve could place interest rates on hold through March of 2019 — or longer — as it awaits clarity on global growth and the US economy.

What does that mean for you? The minutes seem to hint that interest rates for things like mortgages, credit cards, and personal loans may be at a standstill. When the Federal Reserve does increase the federal funds rate, it tends to have a ripple effect across the economy and increases the interest rates of many lending products. This week’s news seemed to encourage investors, as most major market indexes were up at Thursday’s close.

The S&P 500 had its longest winning streak since September

The S&P 500 had its longest winning streak since mid-September, with five straight days of gains as of Thursday’s market close. Reports that the US and China are coming closer to an agreement around trade tariffs, and the release of the FOMC meeting minutes (discussed above), may have helped increase the index.

As for other major stock market indexes; the Dow Jones Industrial Average (DJIA), was up 0.51% and the Nasdaq increased 0.42% at Thursday’s close. Ahhhh yes! Winning feels good. ?

Amazon wants to bring samples to your doorstep

Santa may have some competition in 2019! Alexa, Amazon’s voice-based smart speaker, knows when you’re sleeping, knows when you’re awake, and may now be bringing free gifts to your doorstep. ? Amazon is testing a program using machine learning to partner with brands like Maybelline and Folgers to provide users with free customized product samples. Amazon currently has over 100 million Prime members who may be impacted, so this type of advertising could be a game changer for e-commerce.

And now for your weekly Lionomics wrap-up. ?

Lionomics: Finance made easy

This week in Lionomics, we discussed how taxes affect your investments. As investors, it’s important to consider the tax status of your accounts and investments. Find out now how the taxation of capital gains and dividends, short-term vs. long-term gains, and federal vs. state taxes impact your portfolio. ?

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