ClientFirst Financial Strategies
Financial Planning and Portfolio Management
This week, the Federal Reserve essentially signaled that interest rates will probably continue to rise but at a slower pace than they have throughout this year — meaning 0.50% versus 0.75% increases.
As we head into the last month of 2022, two things are top of mind: the Fed (interest rates) and recession. Although tangentially related, the ultimate results will dictate the coming year in the economy and, thus, the stock market. Both will survive, but which roller coaster will we ride?
Is it time to get giddy about the US stock market? For the week, all three US stock market indices gave us hope as we head to the finish line for the year.
Chairman Powell’s post-meeting comments sent the US stock market in a tizzy indicating there may be more hikes to come! That being the case, market volatility probably will remain elevated alongside this week’s midterm election.
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.