The DJIA index dipped 104 points Tuesday. Why the decline? Expectations for a faster rate increase by the Federal Reserve outweighed improving economic data.
Today's Scorecard:
Dow: 18,011.14, -104.90, -0.58%
S&P 500: 2,091.50, -12.92, -0.61%
Nasdaq: 4,994.73, -16.25, -0.32%
What Moved the DJIA Index Today: The markets are anticipating the possibility of an interest rate increase in June, as better than expected economic data continues to emerge from government reports. St. Louis Federal Reserve President James Bullard called for a raise in interest rates during a speech this morning in London. San Francisco Fed President John Williams also spoke out in favor of raising rates sooner than later.
New home sales hit a seven-year high in February, a sign of surging demand in the housing market. Existing home sales were also up 1.2% in February despite bad weather and a historically quiet month for the markets.
Now, check out the other top market stories - plus get our new profit tip for investors:
Money Morning Tip of the Day: You can profit whether the Fed raises rates in June, October, or next year by owning stocks that are capable of withstanding rate shock.
As expected, the U.S. Federal Reserve didn't raise interest rates at its Federal Open Market Committee meeting that wrapped up last Wednesday. Fed Chairwoman Janet Yellen said the central bank will not hike rates until it sees more improvement in the employment situation and higher inflation in the months ahead.
But the central bank did remove the word "patient" in describing its stance on how it will approach interest rates in the coming months.
Now, investors are scrambling to determine the Fed's timeline and position accordingly.
As Money Morning Chief Investment Strategist Keith Fitz-Gerald recently explained, the best way to prepare for a Fed rate hike - whenever it may happen - is to invest in companies that supply services and products that are indispensable to humanity. Such companies are recession-resistant, even immune.
Here are two to get you started...
Becton, Dickinson and Co. (NYSE: BDX) develops, manufactures, and sells medical supplies and devices, diagnostic products, and lab equipment. It taps into Demographics, one of Fitz-Gerald's six Unstoppable Trends, as the aging global population will create a huge demand for BDX's healthcare services. It offers a dividend yield of 1.70%.
American Water Works Company Inc. (NYSE: AWK) provides water and wastewater services to residential, commercial, and public consumers in the United States and Canada. Everyone relies on running water, so AWK is a perfect "must have." Demand for its services will increase as the world's population grows. Its dividend yield is 2.40%.
Keith Fitz-Gerald shared a third "Fed rate hike-proof" stock to buy. You can get it here: Rising Rates Are a "Wild Card." Here's How to Play It...
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.