|AUTHOR: Jason J. Roque, CFP®, APMA® TITLE: Investment Adviser Rep – CCO TAGS: S&P 500, shutdowns, Housing, Shipping|
A shipping bottleneck and fresh shutdowns across Europe were concerning, but the markets pushed north. What should be expected next?
The week opened up on a up note following the losses from the prior week. The S&P 500 rose .74%. This occurred even as existing homes sales sank 6.6% (Feb). Winter is typically seasonally soft for this data. However, the current lack of inventory is creating a weakness in sales.
Markets gave back everything gained on Monday. New homes sales also plunged on Tuesday by 18.2% (Feb). The US recovery has been running much hotter than expected and appears to be hitting a softer patch. Durable goods, GDP, services, and sentiment are all set to report later in the week to either reinforce economic activity or cause concern in the rebound.
The reversal of fortune continued on Wednesday. The S&P 500 fell 0.55%, while the NASDAQ led lower with -2.01%. Technology continues to trade leadership with value leading industries, such as Financials and Energy.
Consumer spending, initial jobless claims, and GDP data all reported in the green Thursday. Markets marched higher as a result. The S&P 500 rose 20.76 or .54%.
The S&P 500 started the day flat for the week. Most of the day stayed right there. In the closing hours of the day markets rose sharply. The S&P 500 ended up rising 1.66% on the day. This is a good sign as investors were not afraid of being long the market heading into the weekend.
The late surge on Friday does offer a glimmer of hope. Late in the week fresh rounds of shutdowns in Europe were cause for concern. The prevailing thought being that the US would follow shortly. The investor mentality late Friday appeared to signal that they believe the US may be able to avoid that move. Additional concerns persisted as the blockage of the Suez Canal by the Evergiven continued. While concerning as a shipping bottleneck, it is clearly not viewed as a serious economic impediment as of yet. If it were, the buy trend would have not occurred with two more days of news on tap without trading. In all, Friday’s close was encouraging and could signal the start of stabilization of the recent market volatility.
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