Markets Turn More Bullish Following Powell Remarks

BY Benzinga | ECONOMIC | 12/01/22 03:53 AM EST

The CNN Money Fear and Greed index showed a sharp improvement in overall market sentiment following comments from Federal Reserve Chair Jerome Powell.

Powell suggested the central bank could begin easing back on its interest rate hikes starting as early as next month.

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," Powell said, during his speech at the Brookings Institution in Washington, D.C.

The Dow jumped 737 points to close at 34,589.77 on Wednesday. The S&P 500 surged 3.09% to 4,080.11, while the Nasdaq Composite climbed 4.41% to settle at 11,468.00 in the previous session.

Dollar General Corporation (NYSE:DG), The Kroger Co. (NYSE:KR) and Ulta Beauty, Inc. (NASDAQ:ULTA) are set to report quarterly earnings today.

At a current reading of 70.0, the index remained in the "Greed" zone, compared to a previous reading of 61.0.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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