This Forecaster Called the Market Correction. Why He Sees Stocks Bouncing Back — Barrons.com

By Ed Frankl

Turkey's central bank raised its overnight lending rate to 46% from 44% in a surprise meeting on Thursday, attempting to the stem the impact of inflation after the slide in the lira this week.

The Turkish lira hit a record low against the U.S. dollar on Wednesday after the arrest of Istanbul mayor Ekrem Imamoglu, the top political rival to President Recep Tayyip Erdogan. The Borsa Istanbul 100 stock index on Wednesday also fell more than 9%.

Policymakers, however, kept the benchmark policy rate--the one-week repo auction rate--at 42.5%, having last cut it from 45% on March 6. The bank is next due to meet on April 17.

"Assessing the risks that these developments may pose to the inflation outlook, measures have been taken to support the tight monetary stance," the bank said in a statement.

The bank's policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen, the central bank added. Foreign-exchange liquidity measures have been introduced to limit market volatility, it added.

The move suggests that policymakers were spooked by the market volatility and are keen to reassure investors of their commitment to orthodox economic policy, according to Liam Peach, senior emerging markets economist at Capital Economics.

However, it is unclear how much this decision will actually tighten monetary conditions, or whether it will simply give the central bank room to do so in the event of further currency weakness, he said.

Write to Ed Frankl at edward.frankl@wsj.com

European stock markets closed mostly lower in Thursday trading as the Stoxx Europe 600 was down 0.47%, Germany's DAX dropped 1.28%, the FTSE 100 in London was off 0.12%, France's CAC 40 lost 0.93%, while the Swiss Market Index was up 0.33%.

The European Central Bank said Thursday in its latest economic bulletin that the economy, which stagnated in Q4, is expected to remain weak in the near term. It said consumer confidence is "fragile," and that households have yet to be encouraged enough by rising real incomes to increase their spending significantly.

The European Union could delay implementing an initial set of planned counter-tariffs on US goods through mid-April, European Trade Commissioner Maros Sefcovic said Thursday. The bloc had reportedly proposed re-imposing tariffs on some 4.5 billion euros ($4.88 billion) of US products April 1, followed by another 18 billion euros of goods April 13.

In the UK, employment increased by 9,000 between in January from December, and by 44,000 from a year earlier, the Office for National Statistics reported Thursday. Payrolled employees for Q4 dropped by 9,000 from the previous quarter but increased by 72,000 compared with a year earlier.

In Germany, producer prices for industrial products rose 0.7% in February compared with a year earlier, according to the Federal Statistical Office, which attributed the rise mainly to an increase in prices for capital goods.

And in corporate news, UK oil and gas giant Shell has moved up the target start date to 2026 from 2027 to begin exporting natural gas from Venezuela's Dragon gas field to Trinidad and Tobago, Reuters reported, citing two people familiar with the project. Shell did not immediately reply to a request for comment from MT Newswires.

French pharmaceutical company Sanofi said Thursday it plans to purchase Dren Bio's experimental autoimmune treatment DR-0201 for $600 million. The deal, which is expected to close in Q2, also includes up to $1.3 billion in milestone-based payments tied to development progress and potential product launches, the company said.

British pharmaceutical company Akari Therapeutics said Thursday that it has named Abizer Gaslightwala president and chief executive officer, starting April 21. Gaslightwala was most recently senior vice president and franchise head for US Oncology at Jazz Pharmaceuticals, Akari said.

Global Central Banks Wrestle With Slowing Growth, Stubborn Inflation

The Bank of England kept interest rates steady, as major economies confront a nasty mix of faltering economic growth, rising inflation and tariff threats.

Homes Sales Unexpectedly Rose in February

Sales of existing homes rose 4.2%, reflecting an increase in shopping activity and in the number of homes for sale since the start of the year.

U.S. jobless claims still showed few private-sector layoffs, but more ex-federal workers got benefits

The private sector is still culling very few jobs, the latest report on jobless claims shows, but more federal workers fired by the Trump administration are applying for benefits.

Debt Issuance by Governments of Rich Countries to Hit Record, OECD Says

Rich countries are set to issue a record $17 trillion in bonds this year as the higher cost of refinancing existing debts continues to push their interest bills higher.

France to Put Extra $1.85 Billion Into Defense via Public Investment

State-owned financial institutions will invest the funds in the country's defense companies as European countries prepare for a shakeup of the continent's security order.

U.S. Stocks Edge Higher

After opening lower, U.S. stock indexes rose to positive territory. If the gains hold, it will be the fourth daily climb of the past five trading sessions.

Higher Tariffs Would Raise Inflation, Slow Growth, ECB's Lagarde Says

A rise in U.S. tariffs on imports from the EU that was met with retaliation would weaken economic growth in the eurozone and push inflation higher, Christine Lagarde warned.

Fed Projections See an Economy Dramatically Reset by Trump's Election

Not long ago, Fed officials presumed that 2025 would simply be about getting to the soft landing.

U.K. Wage Growth Stays Strong Ahead of BOE Meeting

Wage growth continued at a strong clip, likely ensuring Bank of England policymakers will remain cautious as they mull dialing back interest rates.

Swiss Central Bank Cuts Key Rate While Sweden's Riksbank Holds

Switzerland's central bank lowered its key interest for a fifth straight meeting, while its Swedish counterpart left rates unchanged for the first time since mid-2024.

Wall Street extended its gains in early trade on March 20, as investors welcomed upbeat housing data that eased concerns over the economy's strength.

The S&P 500 climbed 0.3 percent, while the Nasdaq Composite advanced 0.4 percent. The Dow Jones Industrial Average edged up 87 points, or 0.2 percent.

Fresh economic data suggested that worries about the US economy might be overstated. The National Association of Realtors reported that sales of previously owned homes in February rose by 4.2 percent from January, defying industry expectations of a 3 percent decline. Additionally, jobless claims saw only a slight uptick last week, while layoffs remained low. These positive indicators reassured investors that economic conditions may not be as fragile as feared.

The data release followed Fed Chair Jerome Powell’s comments affirming that the economy remains “strong overall” and that monetary policy is in a “good place” to respond to any signs of weakness. Powell also downplayed the inflationary impact of tariffs, suggesting they would likely be short-lived or transitory.

Meanwhile, the Federal Reserve's reaffirmation of two more rate cuts in 2025 provided further relief to investors concerned about the policy outlook.

On Wednesday, the Fed held interest rates steady at 4.25 percent to 4.5 percent, citing rising ‘uncertainty’ around the economic outlook in recent weeks. The central bank also highlighted concerns over inflationary risks, particularly in light of former President Trump’s tariff plans.

In response, the rate-setting panel raised its median core inflation estimate to 2.8 percent from 2.5 percent by year-end. Economic growth projections for 2025 were lowered to 1.7 percent from the previous 2.1 percent forecast, while the unemployment rate projection was revised slightly higher to 4.4 percent from 4.3 percent in December.

Powell acknowledged that assessing the impact of tariffs on inflation remains challenging, but current surveys indicate that tariffs are pushing inflation expectations higher. He also noted that inflation has begun to rise, partly due to the effects of tariffs.

Despite these concerns, policymakers reiterated their expectation of two rate cuts in 2025. The latest rate projections showed that a slim majority of Fed officials still anticipate a total of half a percentage point in rate reductions this year, implying two quarter-point cuts—unchanged from their December forecast.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.

By Ed Frankl

The outlook for the U.S. economy weakened for a third-straight month in February, dragged by weakening consumer confidence amid uncertain federal policies from the Trump administration.

The Leading Economic Index, or LEI, published Thursday by research group The Conference Board, dropped 0.3% in February, after an upwardly revised 0.2% fall in January. Economists polled by The Wall Street Journal had expected a 0.2% decline.

"Consumers' expectations of future business conditions turned more pessimistic," The Conference Board's Justyna Zabinska-La Monica said. "That was the component that weighed down most heavily on the index in February."

Manufacturing new orders also retreated after improving in January, she added.

The LEI continues to point to troubles brewing ahead, she noted. Given "substantial policy uncertainty" and weaker consumer sentiment and spending since the turn of the year, economic growth is expected to slow to around 2.0% this year, less than the 2.3% forecast just a month ago, she said.

However, the LEI's six-month and annual growth rates, while still negative, have been on an upward trend since the end of 2023, suggesting headwinds in the economy as of February may have moderated compared with last year.

The LEI is a predictive variable that anticipates turning points in the business cycle by around seven months. The indicator is based on 10 components, among them manufacturers' new orders, initial claims for unemployment insurance, building permits of new private housing units, stock prices and consumer expectations. It is intended to signal swings in the business cycle.

Write to Ed Frankl at edward.frankl@wsj.com

By Katy Barnato and Ryan Dezember

Stocks have resumed their post-Fed rally.

After opening lower, U.S. stock indexes rose to positive territory. If the gains hold, it will be the fourth daily climb of the past five trading sessions.

In Europe, equities and the euro weakened, after European Central Bank President Christine Lagarde warned tit-for-tat tariffs would weaken growth and fuel inflation.

Stocks had advanced Wednesday, after the Federal Reserve broadly held its projections for rate cuts this year unchanged. That was less hawkish than some investors had feared, given a worsening outlook for inflation.

Several central banks in Europe made rate decisions in the wake of the Fed Thursday. The Swiss National Bank cut, while the Bank of England and its Swedish counterpart kept rates unchanged.

In recent trading:

Major stock indexes rose. The Nasdaq, Dow industrials and S&P 500 each were up less than 1%.

The dollar strengthened, while the euro and the Swiss franc sold off. The U.K. pound was modestly lower.

Benchmark Treasury yields fell to about 4.2%, after settling Wednesday at 4.257%.

Gold prices held steady. Front-month contracts notched another record high Wednesday, settling at $3,035.90.

Coming up:

Earnings are due Thursday from FedEx, Micron, Nike and others.

Write to Katy Barnato at katy.barnato@wsj.com and Ryan Dezember at ryan.dezember@wsj.com

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