Analysts from Wolfe Research have said the US stockmarket is currently being affected by a "Fed storm" factor and could face near-term volatility due to uncertainty around the central bank's future actions.
Wolfe Research constructs the "Fed storm" factor based on news from the Federal Reserve carrying extreme sentiments, either hawkish or dovish. According to its Prattle Central Bank Sentiment Data, a spike in press releases and public speeches made by the Federal Reserve occurs when it has an important policy decision to announce, and this can offer "great market timing ability". Yin Luo, vice president for quantitative research, economics, strategy (QES) at Wolfe Research, said any big announcements, either hawkish or dovish, would result in a negative reaction from equity markets. ...
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