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Economic development and changes in the overall outlook led the Fed to announce yesterday its decision to combat rising inflation by accelerating the reduction of its bond purchases. The Fed also announced that interest rate hikes will be adopted as soon as the bond purchase tapering is wrapped up in 2022. However, the Federal Open Market Committee reduced its forecast for economic growth to 5.5% for 2021, down from the 5.9% reported in September. So, the market’s volatility is expected to persist.
The Walt Disney Company (DIS) and Verizon Communications Inc. (NYSE:VZ) are two DJIA stocks that have retreated more than 10% on a year-to-date basis. In addition, they look overvalued at their current price levels. Hence, we think it could be wise to avoid them now.
