ClientFirst Financial Strategies
Financial Planning and Portfolio Management
One week into the new year, we have year-to-date gains to celebrate! More than likely, the US stock market will continue to experience high volatility this week with additional economic data and the beginning of 4Q2022 earnings releases.
For sure, the Grinch came out this past week with all three major US stock market indices sustaining losses. Some analysts place the blame on the Fed continuing to raise interest rates to fight inflation while others point the finger at institutional investors licking their wounds for the year by booking losses before year end.
Tis’ the season to be jolly but also the time of the year when analysts’ forecasts become most prevalent. Always remember, you can never be wrong if you don’t have an opinion! We are sharing two as food for thought.
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.