Yellen’s Days Are Numbered
A new Fed Chair is set to succeed Janet Yellen, with strong employment and consumption figures expected to highlight the week. German Giant JAB Holdings goes juggernaut with another big buyout, but analysts continue to fret over a potential correction.
New Fed Chair: Janet Yellen’s term as chair of the Federal Reserve expires at the end of this week, Feb. 3. The two-day meeting Tuesday and Wednesday will be her last, as she’s leaving the board, as well. Yellen will be replaced by Trump appointee Jerome Powell. Powell is in his fifth year on the Fed's board, and has mostly voted in continuity with Yellen — cautious rate increases and a gradual tapering of the central bank's $4.4 trillion stash of bonds.
Jobs Report: On Friday, the Labor Department will release its January jobs report. Analysts expect the economy added 188,000 jobs for the month. Consumer spending and manufacturing numbers are also on tap this week.
Beverage Buyout: Keurig Green Mountain Inc. is buying Dr. Pepper Snapple Group Inc. in a deal worth more than $21 billion. The move brings the world’s biggest single-serve coffee brand, K-Cup, and 7UP, Snapple, and Sunkist under one roof. JAB Holdings, which took Keurig owner Green Mountain Coffee Roasters private in 2016, previously acquired restaurant chains Krispy Kreme and Panera Bread, as well.
Towering Stocks At Risk: The S&P 500 has already risen 7% this year and hit another new record high on Friday. It’s gone without a 5% correction for the longest period since 1929. At this point a correction seems inevitable. The only question is, when?
Goldman Sachs believes sooner rather than later, saying its "correction signals are flashing."
"Whatever the trigger, a correction of some kind seems a high probability in the coming months," Peter Oppenheimer, chief global equity strategist at Goldman Sachs, wrote Monday. "Our Goldman Sachs Bull/Bear Market Indicator is at elevated levels, although the continuation of low core inflation and easy monetary policy suggests that a correction is more likely than a bear market."
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