Navigating a Slowdown

Last week, the Federal Reserve stepped out and raised short-term interest rates to their highest level in more than nine years. Initially, the market shrugged. We're all expecting this, it figured, and the reaction was rather orderly.

Not so fast. This week, the stock market has been in a world of hurt, as investment managers and strategists confront the prospect of slowed economic growth thanks to the Fed's efforts. Decreased business investment, slowed consumer spending and the potential for rising inflation all look to threaten this nine-year expansion.

The Nasdaq Composite Index hasn't recovered from what many expected to be a brief dip, and that's opened investors' eyes to a startling and uncomfortable reality -- Wall Street may be a hard place to make money during the rest of this year and perhaps next year also. The days of putting it all down on tech and letting it ride appear to be a thing of the past. Meanwhile, the Dow Jones Industrial Average is off about 400 points since the Federal Reserve began hiking rates last June.

Has the market overreacted? Perhaps.

But there's no doubt out there that the economy is changing, and for investors to survive, the old strategies (and the hope that old trend would reassert itself) don't figure to work anymore. Today, we look at the state of the economy and the ways in which investors are going to deal with it.

The first piece details what kinds of strategies investors are employing, and which sectors strategists are looking at now that technology has receded as a favored sector. The second story, with contributions from several TheStreet.com and TheStreet.com/NYTimes.com reporters, looks at various sectors of the economy to see whether people are talking slowdown, inflation or recession.

Lastly, we look at one of the economy's most cyclical sectors, and one of the first to begin hurting when the economy slides -- car manufacturers.

Navigating a Slowdown: Place Your Bets; the Economic Roulette Wheel Spins!
Strategists weigh in on where we are and where we're going.

Auto Sales Still Humming, Despite Forecasts of Idling
Detroit will wait to see if the recent interest rate hikes, however, put sales in neutral.

Navigating a Slowdown: Fed's Squeeze Hardly Choking Off Growth
The economy will slow from its recent torrid pace, but a severe slowing doesn't look likely.