Blog Post

Stocks Fall as Traders Await the FED’s Next Move

All major stock indices ended the week lower with the small cap Russell 2000 declining by 5%.  The Federal Reserve is scheduled to meet next week and is expected to hike short term interest rates by 0.5%.

The Bank of Canada raised the benchmark overnight interest rate 0.5% to 4.25%.  In a statement the bank said the “Governing Council will be considering whether the policy rate needs to rise further to bring supply and demand back into balance and return inflation to target.”  This contrasts with the U.S. FED’s indication of more rate hikes in 2023 to combat inflation.  The lesson of the 1970s was it would be a mistake to ease or reverse hikes too soon.

Three companies announced a joint venture to build a $4BN renewable powered hydrogen factory in North Texas.  The plan is expected to produce 73,000 metric tons of green hydrogen per year.  Most hydrogen today is used to make fertilizer and the refining of fossil fuels but can also power fuel cell vehicles.  Green hydrogen is produced totally without CO2 emissions by using wind and solar electricity to separate water into hydrogen and oxygen.

Treasury bond yields rose with the 30-year bond at 3.567% and the 10-Year note at 3.586%.  30-year mortgage rates fell to 6.49%.  Crude oil fell to $71.46 a barrel and natural gas rose to $6.303 per MMBTUs.  The U.S. dollar index rose to 104.93 and gold fell to $1809.40 an ounce.

  • China reported:
    • Consumer prices in November rose 1.6% from a year ago.
    • Producer prices fell 1.3% from a year ago.
  • S&P Global released its purchasing manager’s services indices for November.  Keep in mind that anything over 50 represents expansion while anything under 50 represents contraction.
    • Japan services PMI fell from 53.2 to 50.3.
    • U.S. services PMI fell from 47.8 to 46.2.
    • China services PMI fell from 48.4 to 46.7.
    • Eurozone services PMI rose from 47.3 to 47.8.
  • The Commerce Department reported:
    • New orders for manufactured goods rose 1.0% in October, this highest in four months.
    • The trade deficit rose in December as exports fell and imports rose.
      • Exports of natural gas, oil pharmaceuticals led the decline.
      • Imports increased led by energy products, vehicles and pharmaceuticals.
  • The Labor Department reported:
    • The producer-price index rose 0.3% in November and is up 7.4% from a year ago.  This is down from 8.1% in October and a multi-decade high of 11.7% in March.
      • The core PPI, excluding volatile food, energy and supplier margins, also rose 0.3% in November and is up 4.9% from a year ago.  This was down from 5.4% year over year in October.
    • Seasonally adjusted first-time claims for unemployment were 230,000, up from a revised 226,000 in the prior week.
      • The 4-week moving average of claims, designed to smooth out volatility, was 230,000 up from a revised 229,000 in the prior week.
      • For the full unemployment report go here: .
  • The EIA weekly oil report is here: .  Also, the EIA reported in the prior week:
    • Field production of crude oil rose from 12.1MM BPD to 12.2MM BPD.
    • Natural gas storage fell 21BN cubic feet and about at 5-year average at this time of year.
  • Baker Hughes reported the number of active oil rigs fell 2 to 625.  The number of active natural gas rigs fell 2 to 153.

Please call us if you have any questions.

Thank you,

Loren C. Rex, CFP®, MA                                                                     Erik A Smith, AIF®

Founder / Emeritus                                                                            President & C.E.O.                                  269-441-4143                                                                                    517-795-2025

Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.

These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.


If you are serious about planning for your future, we want to meet with you. We ask that you provide us with some basic information so we can assess your needs and schedule a meeting. Please follow the link below to complete our survey.