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Weekend reads: As the Fed turns, so does investors’ outlook for the stock market in 2022

Maybe you’ll be seeing the word “transitory” less often in the financial media, unless it is to poke fun at Federal Reserve Chairman Jerome Powell and other central-bank officials’ pivot to hawkishness on monetary policy.

Powell recently said it was “probably a good time to retire the word.” Gregg Robb considers what word might take its place.

Inflation took an uglier turn this week before the Fed changed course. Even when the Bureau of Labor Statistics said the consumer price index in November was up 6.8% from a year earlierthe largest increase in in 39 years — you might have thought the figure a bit light, based on your own experience. But then on Dec. 14, the government said producer prices were up 9.6% in November from a year earlier.

With all the warnings in the financial media that a change in policy by the Federal Reserve would spook the stock market, investors’ reaction was mild when the Federal Open Market Committee said on Dec. 15 that it would accelerate the slowdown of its bond purchases and wind them down to zero in March. That might put upward pressure on long-term interest rates. Then again, negative interest rates outside the U.S. may keep demand for U.S. Treasury paper high enough to hold yields down. Early on Dec. 17, the yield on 10-year U.S. Treasury notes was 1.39%, down from 1.49% a week earlier.

On the short end of the rate curve, the Fed signaled three increases to the federal-funds rate during 2022, from its current target range of zero to 0.25%.

Jeffry Bartash summarizes all the Fed’s policy moves and signals here.

More coverage of the Federal Reserve’s outlook and policy changes:

New game plan for income-seeking investors

Michael Brush makes the case for dividend stocks as interest rates rise and names three candidates to consider.

A contrarian list of stocks for 2022

Sometimes it can pay for an investor to moved against the herd.

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Barbara Kollmeyer writes the daily Need to Know column, summarizing the early market buzz each day. But this week she shared something for investors looking ahead to different action in the stock market after such excellent performance for the broad indexes during 2020 and 2021. Here are lists of contrarian stock plays for 2022 from analysts at Citigroup.

Deep thoughts about inflation and the stock market

Reports of high inflation and a coming clampdown by the Fed have spooked some investors this week. But Mark Hulbert explains why there may be a silver lining for the stock market in economic reports next year.

More from Mark Hulbert: Inflation-adjusted Treasury yields are lower than they’ve been in 70 years. Here’s why that isn’t a bigger negative for stocks

Video games, money and life
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Jeremy Olshan, managing editor for Barron’s Group, interviews Ninja, a popular-videogame streamer, about the lessons games can teach people about money, budgeting and life-skills.

The next hot housing markets
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Jacob Passy shares a list of “hidden gems” in the housing market — 10 areas poised for significant price growth in 2022.

A tip for mutual fund investors

A mutual fund — as opposed to an exchange-traded fund —- prices once a day at the market close and shares can only be bought and sold at that time. The share price is called the net asset value, or NAV, and it is the sum of the fund’s assets divided by the number of shares. That means if the fund pays a dividend, or a capital gain, it comes out of the share price.

Debbie Carlson explains how brutal capital-gains distributions can be for mutual-fund investors because of the tax consequences.

How much will your financial adviser really cost you?

Paying 1% to a financial adviser may seem reasonable if you don’t feel confident about making your own investment selections. But Paul Merriman, a former adviser himself, explains that over the long term, those fees can add up to “a million-dollar decision.”

Schemes and scams
MarketWatch photo illustration/iStockphoto, Amazon

Lukas I. Alpert writes the Financial Crime column — it can’t hurt to keep up with the latest “innovations” in the connected criminal world. Here’s a sampling of his coverage this week:

The 12 bottles of Christmas

Charles Passy writes the Weekend Sip column. This week he shares what everyone needs: 12 bottles of wine, liquor or beer for everyone on your holiday list.

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