A volatile stock market faces a critical test next week, when the US Federal Reserve is expected to raise interest rates and give more insight on its plans for tightening monetary policy to fight surging inflation.
Worries over an increasingly hawkish Fed have helped drag the benchmark S&P 500 index down by 13.3 per cent so far in 2022, its steepest four-month decline to start any year since 1939.
While investors have raised expectations of how aggressively the central bank may tighten monetary policy, many are concerned the Fed will not be able to keep the economy afloat as it battles the worst inflation in nearly four decades.
Compounding concerns over monetary policy, investors have been riled by everything from rising bond yields to the war in Ukraine and more recently lockdowns in China. The market is also entering a historically weaker six-month period for stocks.
“We’re going to be in for, I think, more dicey, choppy, volatile markets here for a while longer, just because of the uncertainty,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"Things turned the other direction right at the beginning of the year”, coming off a strong fourth quarter at the end of 2021.
Investors widely expect the Fed to raise rates by 50 basis points when the central bank's meeting concludes on Wednesday.
They are also bracing for signals from Fed chair Jerome Powell about the future path of interest rates, the central bank's plans for reducing its balance sheet and its view on when inflation will recede.
Policymakers raised rates in March by 25 basis points, the first increase since 2018.
“If the Fed continues to expect high levels of inflation and they don’t see it moderating in the future, that will be a concern for investors," said Michael Arone, chief investment strategist at State Street Global Advisers.
"It will mean that the Fed will continue to raise rates and tighten monetary policy, which the market is expecting, but maybe even more aggressively."
Beyond next week's action, policymakers have coalesced around an overall increase of the federal funds rate to at least 2.5 per cent by year end.
Crucial to the tightening plans will be how persistent officials view the current pace of inflation after March's consumer price index showed an annual increase of 8.5 per cent, the largest rise in more than 40 years.
Given that there are indications inflation has started to peak, said Kei Sasaki, senior portfolio manager at Northern Trust Wealth Management, “if there is an even more resounding hawkish tone coming out of that meeting, then that could certainly be viewed as negative".
The sell-off accelerated on Friday as the S&P 500 tumbled 3.6 per cent — its biggest one-day drop since June 2020 — following a disappointing earnings report from Amazon that sent the e-commerce company's shares down 14 per cent.
The month of April marked the S&P 500's biggest monthly fall since the onset of the coronavirus pandemic in early 2020, while the tech-heavy Nasdaq logged its largest monthly drop since the 2008 financial crisis.
As investors have girded for tighter monetary policy, bond yields have jumped this year, with the yield on the 10-year Treasury note up to about 2.9 per cent from 1.5 per cent at the end of 2021.
That has particularly put pressure on tech and growth stocks, whose valuations rely on future estimated cash flows that are undermined when the investors can earn more on risk-free bonds. The Russell 1000 growth index has fallen about 20 per cent so far this year.
Meanwhile, investor sentiment is dour. The percentage of individual investors describing their six-month outlook for stocks as "bearish" rose to 59.4 per cent, its highest level since 2009, the latest weekly survey from the American Association of Individual Investors found.
To be sure, after the market's recent slide, the Fed's actions could provide some comfort. Following the Fed's expected rate hike in March, the S&P 500 rallied more than 8 per cent over the ensuing two weeks.
Investors will keep an eye on corporate results, after a mixed week of earnings from megacap companies. Reports from Pfizer, Starbucks and ConocoPhillips are due next week, among others.
With the calendar flipping to May, seasonality also looms as a possible factor for investors. The S&P 500's strongest six months of the year since 1946 have been November through April, when the index has risen an average of 6.8 per cent, according to a CFRA note earlier in the week.
By comparison, the index has gained only 1.7 per cent on average from May-October.
However, more recently, the trends have not been as strong. In the past five years, the S&P 500 has averaged a 7.2 per cent gain in the May-October period versus 5 per cent for November-April, according to a Reuters analysis.
"I don’t know how important seasonality is going to be this time around,” said Jack Ablin, chief investment officer at Cresset Capital Management.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
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Available: Now
MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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The five pillars of Islam
Why does a queen bee feast only on royal jelly?
Some facts about bees:
The queen bee eats only royal jelly, an extraordinary food created by worker bees so she lives much longer
The life cycle of a worker bee is from 40-60 days
A queen bee lives for 3-5 years
This allows her to lay millions of eggs and allows the continuity of the bee colony
About 20,000 honey bees and one queen populate each hive
Honey is packed with vital vitamins, minerals, enzymes, water and anti-oxidants.
Apart from honey, five other products are royal jelly, the special food bees feed their queen
Pollen is their protein source, a super food that is nutritious, rich in amino acids
Beewax is used to construct the combs. Due to its anti-fungal, anti-bacterial elements, it is used in skin treatments
Propolis, a resin-like material produced by bees is used to make hives. It has natural antibiotic qualities so works to sterilize hive, protects from disease, keeps their home free from germs. Also used to treat sores, infection, warts
Bee venom is used by bees to protect themselves. Has anti-inflammatory properties, sometimes used to relieve conditions such as rheumatoid arthritis, nerve and muscle pain
Honey, royal jelly, pollen have health enhancing qualities
The other three products are used for therapeutic purposes
Is beekeeping dangerous?
As long as you deal with bees gently, you will be safe, says Mohammed Al Najeh, who has worked with bees since he was a boy.
“The biggest mistake people make is they panic when they see a bee. They are small but smart creatures. If you move your hand quickly to hit the bees, this is an aggressive action and bees will defend themselves. They can sense the adrenalin in our body. But if we are calm, they are move away.”
Mountain%20Boy
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Under 19 Cricket World Cup, Asia Qualifier
Fixtures
Friday, April 12, Malaysia v UAE
Saturday, April 13, UAE v Nepal
Monday, April 15, UAE v Kuwait
Tuesday, April 16, UAE v Singapore
Thursday, April 18, UAE v Oman
UAE squad
Aryan Lakra (captain), Aaron Benjamin, Akasha Mohammed, Alishan Sharafu, Anand Kumar, Ansh Tandon, Ashwanth Valthapa, Karthik Meiyappan, Mohammed Faraazuddin, Rishab Mukherjee, Niel Lobo, Osama Hassan, Vritya Aravind, Wasi Shah
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
On sale: now
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Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
UAE currency: the story behind the money in your pockets
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
More from Rashmee Roshan Lall
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
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UK's plans to cut net migration
Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.
Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.
But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.
Language requirements will be increased for all immigration routes to ensure a higher level of English.
Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.
The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.
