The market moved to the rhythm of earnings season last week, initially rising on positive earnings, and then ending the week flat. This week is an important one, with the release of more quarterly corporate earnings and the federal reserve meeting.
Corporate earnings should set the tone for the rest of the second quarter earnings season with many important companies reporting throughout the week. On Wednesday, the federal reserve will complete their meeting with an expected 0.25% interest rate hike. If the fed doesn’t raise rates as expected, it could spur a strong market rally with the hopes that the tightening cycle is complete and there will be no more rate increases. If they do raise rates as anticipated, it could be one of the last ones of this 2-year tightening cycle.
Another rate increase from the Fed could spur a short downward trend, offering an opportunity to invest excess cash and help build your portfolio during this bullish market. As an advisor, I take advantage of these opportunities to rebalance your portfolio (as needed) and invest excess cash from dividends and contributions.
Photograph by: Paul Barlow on Unsplash
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