This is, of course, to be expected. As the Federal Reserve continues to hike interest rates to bring down inflation, the likelihood of a recession grows. That makes shoppers less inclined to spend cash that they could be saving for upcoming rainy days instead. How much people are shopping is an important indicator in the U.S. economy, since 70% of GDP is consumer spending. In other words, when people stop shopping, the economy starts to slow down. After rallying yesterday despite news that inflation remained stubbornly high, markets are falling today as they continue to digest the inflation and retail sales data. Earnings season has officially started, which could provide some boosts if companies post strong quarterly reports. But investors are going into the next few weeks expecting things to not go so well. It is estimated that quarterly growth for the country’s largest companies will only be 2.4%—the worst since the third quarter of 2020. So continue to expect some trouble and volatility ahead. And if you want to save yourself some heartache, don’t stare at your investment accounts each day. You might end up disappointed. This article originally appeared in ‘The Balance Today’ newsletter. You can get ‘The Balance Today’ delivered to your inbox daily, just sign up here.
