“I’m not afraid of tariffs and it’s not hard for me to find good stocks to invest in. If a company has such a fragile balance sheet that a couple of tariffs would do them in — it’s not a company I’d invest in anyway.”
The Fed started its two-day policy meeting where it is expected to hold steady on benchmark interest rates following a stellar November jobs report, but investors will be eager to glean details on the outlook for monetary policy. The WSJ reported that Fed Chairman Jerome Powell’s main assignment will be to forge consensus toward a “broader revamp of the Fed’s rate-setting strategy” as he encourages the central bank to let inflation run above its annual 2% target.
“The question will be how dovish is the ‘hold’ that the Fed will deliver tomorrow,” Jim McDonald, chief investment strategist at Northern Trust told MarketWatch. “That’s really the only area of potential surprise.”
On the U.S. economic data front, a report on small-business owners’ confidence in the U.S. economy rose in November, its largest month-over-month gain since May 2018, as owners continued to invest, hire and increase wages, according to the National Federation of Independent Business.
A final estimate of productivity and labor costs in the third quarter also showed productivity falling 0.2% versus the initial estimate of a 0.3% decline. Economists polled by MarketWatch expected the number to be revised to a 0.1% contraction. Unit-labor costs, meanwhile, rose 2.5% in the quarter, more slowly than the initial 3.6% estimate and lower than the 3.0% growth expected by economists.
Which stocks are in focus?
Shares of Netflix Inc . /zigman2/quotes/202353025/composite NFLX +1.23% closed 3.1% lower Tuesday, after Needham analyst Laura Martin downgraded the stock to underperform from hold, as she predicted the online streaming service will lose 4 million subscribers next year amid tough competition from rivals.
NortonLifeLock Inc . /zigman2/quotes/200957356/composite NLOK -0.05% attracted interest in a possible buyout from several suitors, including rival McAfee LLC, according to a Monday-evening WSJ report. Shares rose 3.5%.
Peloton Interactive Inc . /zigman2/quotes/208035743/composite PTON -1.51% shares fell 5.7% after short seller Citron Research penned a negative report on the maker of exercise equipment.
How are other markets faring?
West Texas Intermediate crude for January delivery /zigman2/quotes/209723652/delayed CLF22 -0.76% on the New York Mercantile Exchange rose 22 cents, or 0.4%, to $59.24 a barrel, as trade optimism waxed.
February gold on Comex added $3.20, or 0.2%, to settle at $1,468.10 an ounce as China and the Fed were in focus.
The U.S. dollar, as measured by the ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.14% , declined 0.1% at 97.50 against a basket of a half-dozen currency peers.
In Asia overnight Friday, the Hang Seng /zigman2/quotes/210598030/delayed HK:HSI -1.24% closed off 0.2%, the China CSI 300 /zigman2/quotes/210598128/delayed XX:000300 -0.16% inched up 0.1%, while the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.10% gained about 0.1%, following a similar gain on Monday. Japan’s Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK +2.08% retreated 0.1%.