ClientFirst Financial Strategies
Financial Planning and Portfolio Management
Carly Simon’s song, “Anticipation,” is a great metaphor for what occurred this week with the Fed’s announcement of a 0.25% increase in interest rates and the subsequent market reaction.
Slowly, oh so slowly, the three major US stock market indices keep marching upwards. Since the January breakout rally, the US indices have trended sideways for the most part.
It truly is like watching paint dry! All three major US stock market indices were down negligibly for the week. In fact, the broad market S&P 500 hasn’t produced much of a return since the January 2023 resurgence—needless to mention, the past two years.
We eked out another week of broad-based positive US index returns . For some reason, US stocks continue to rise in the face of persistent inflation, albeit at a slower pace. It appears that the market is hanging its hat on the hope that the Federal Reserve will start to lower interest rates near the end of 2023.
1Q2023 ended with a bang as the major US stock market indices were up across the board. Lately, much of the US stock market is focusing on the Federal Reserve and Chairman Powell’s next policy meeting occurring May 2-3. While this is unquestionably important, there are many other things that matter when determining the market’s ultimate path.
If Meghan Trainor were a financier, she may consider reprising her 2014 hit song as “all about those banks!” Yet all three of the major US stock market indices shrugged off the woes of Silicon Valley Bank, First Republic, Signature and Credit Suisse to post gains this week.
You never would have guessed that two of the three major US stock market indices would post gains this past week with what occurred in Silicon Valley Bank, Signature Bank, and the broader banking sector! Mega-cap tech names like Microsoft, Apple, and Google led the charge as a flight to safety trade.
All three major US stock market indices had a rocky ride to the downside this past week, especially on Friday. You may have heard that Silicon Valley Bank announced its failure on Friday, making it the second largest bank in US history (behind 2008’s Washington Mutual) to fail.
The US stock market finally broke the losing streak with all three major indices in the green this past week. The economy and sales growth for corporations still appear to be slowing as interest rates continue to rise.
US stock market indices incurred another down week, making it the third weekly loss for the S&P 500 and Nasdaq and the fourth for the DJIA. As stated in our previous Weekly H&Cs, the labor market remains strong, forcing the Federal Reserve to combat what appears to be 1970’s-like wage-push inflation.