ClientFirst Financial Strategies
Financial Planning and Portfolio Management
The winning streak continued this past week with the major US stock market indices posting gains again. In fact, the DJIA thus far in October has outperformed the tech-heavy Nasdaq by the largest margin since the dot-com bubble burst over twenty years ago.
Should we get giddy yet? With this week’s US stock market performance, the DJIA has a three-week winning streak and the S&P 500 and Nasdaq have posted two straight.
Somewhat severe volatility hit the stock market on Thursday after the CPI report came in at a 40-year high. Several Wall Street analysts feel that extreme volatility, like Thursday’s, sometimes implies that we’re not too far from reaching a trough.
When the US stock market indices end the week with a down Friday, it doesn’t feel very good. Surprise! Thanks to this past Monday and Tuesday, all three major US stock market indices produced positive results for the week for the first time in who knows how long.
3Q2022 was the worst nine months of returns in the major US stock market indices since 2002!
We have we seen this movie before. For the past 4 out of 5 weeks, the major US stock market indices were down again.
As of Friday’s close, we hang slightly above the June lows for the year. The concern about recession seems to be the main theme from many market analysts.
After three weeks of losses, the US stock market indices finally posted gains. “What caused it?” you might ask. Maybe the law of averages? But truly the catalyst is nowhere to be found!
We now have two straight weeks of negative returns in the major US stock market indices, and it was a doozy, especially on Friday! Federal Reserve Chairman Jerome Powell made perfectly clear his intention to beat inflation. In no uncertain terms, that means raising interest rates higher for longer to slow down economic growth.
Sooner or later, after four weeks of gains in the S&P 500, we experienced negative returns in all three of the major US stock market indices. It appears that rising interest rates (and bond yields) may push down stocks.