Stocks Stopped Falling As Investors Await Fed’s Interest Rate Increase

In the stock market today, Tuesday June 14, 2022, stocks were calm in trading in anticipation of the Federal Reserve’s probable interest rate increase tomorrow.

Early last week, investors were expecting a 0.5% increase in the fed funds rate. Then, on Thursday, investors were fearfull inflaton would be higher than expected, and stocks sold off hard. Then on Friday, confirmation that the 12-month inflation rate rose from 8.3% in April to 8.6% in May caused another selloff, which continued into Monday.

The S&P 500 declined 0.4% in today’s action to close at 3735 while the NASDAQ rose 0.2% to clsoe at 10828.

The big picture is the S&P 500 was around 4100 last week, is 3735 now, and is now expected to decline to around 3400 due to higher inflation. But with the market already down so much, that’s only 9% away. So it seems much of the bad news is now priced into the market.

Chart of the Day

Ball Corp (BALL) is a 142 year old company that management says is recession-resistant as it can pass rising costs on to its customers.

Here’s the ten-year chart of BALL as of June 4.

BALL is a relatively safe stock with an Estimated Long-Term Growth Rate of 14% per year in addition to a 1% yield. Management has a long-standing financial strategy of 10% to 15% profit growth over time. Profits are expected to grow 10% this year. The stock has a P/E of 19, which is a good price for new investors to pay.

BALL is part of our Conservative Growth Portfolio. My Fair Value on the stock is $88.

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