2022 Flashback! | August 18, 2023

AUTHOR: Jason Roque, CFP®, APMA®, AWMA®
TITLE:   Investment Adviser Rep – CCO
TAGS:   S&P 500, NASDAQ, China, Jobs, Inflation

Markets shed weight for the third week in a row. With the flashback of 2022 does this trend look to continue?

Monday       S&P 500 0.60% | NASDAQ 1.10%

Markets gained to open the week. There was little data to support the rise but is littered with indications of consumer health. The growth may have been anticipatory of gains expected later in the week…

Tuesday         S&P 500 1.16% | NASDAQ 1.14%

Markets opened deep in the red and stayed there all day. It was predicated by a rate cut out of China as their economy continues to show signs of stalling. The move in Asian markets spilled over to domestic markets.

Wednesday  S&P 500 0.76% | NASDAQ 1.15%

Until about midday, markets were floating higher. They shifted into the red after the Federal Reserve Board (FRB) minutes from last month’s meeting were released. The minutes showed that the FRB priority was still battling inflation as opposed to a measured pause to rate hikes. This has a greater impact on Growth stocks over time. The NASDAQ led markets lower because of its Growth heavy exposure.

Thursday      S&P 500 0.77% | NASDAQ 1.17%

Initial claims for unemployment benefits came in lower than expected. This continues the trend of below expectation weakness for the job market. The concern with the strong job market is that it could lead to further FRB rate hikes. This led to higher open market rates and a weaker stock market.

Friday          S&P 500 0.02% | NASDAQ 0.20%

With no economic data out on Friday, markets were little changed. Perhaps a breather after three straight weeks in the red was called for. The earnings calendar was light as well but did experience an earnings miss on the day.  

Conclusion   S&P 500 2.11% | NASDAQ 2.60%

The week started on the right note but quickly soured. Since the peak at the end of July, the S&P 500 has shed 5.15%. Since the market low on 9/30/2022, markets have had a healthy surge. We are approximately 11 months from when equities hit their most recent bottom. All things considered a correction is not out of line. The Next month or so will see trading volume increase to a more normal level. As that occurs, it could mean more volatile days ahead.

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Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.

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