In my last newsletter I discussed some of the reasons why a year-end rally could take place in the stock market and the support levels I was watching. With where we stand today, a year-end rally may be starting this week after a further decline occurred in October.
As we begin to turn the page on another month, and another quarter, the market enters the final quarter of the year on shaky ground. As was outlined in our last report, September- a historically poor month for the market- has seen the drop in the market continue. It’s beginning to close in on levels in the S&P 500 that a typical correction would drop to.
The long-awaited correction in the market has been playing out as we near the end of August. So far as it’s played out, it appears to be just that- a correction. And not something deeper signaling another top in the market yet. Another push to new highs could be on the horizon, but historically the month of September can be tricky.
It’s hard to believe, but yes, we are already halfway through the year. We have seen quite the change in 6 months compared to where things were at the end of 2022. There are things about this market currently to get excited about, and things that signal caution. Both bulls and bears can present compelling arguments for why the market will go up or down from here, with many possibilities in between.
The week of April 24th saw many of the mega-cap stocks report earnings, with most of them posting impressive first quarter results that led to their stock prices moving higher. Microsoft, Alphabet (Google), and Meta (Facebook) all saw significant gains after their release of first quarter earnings
The Fed has a tough challenge ahead of them with very few options. Most of the aggregate growth in the economy was financed by massive deficit spending, credit creation, and a reduction in consumer savings.