The stock market faced several tests last week with higher-than-expected inflation reports and the outbreak of war in the middle east. Despite the negative news, a resilient market rose slightly.
The hot inflation numbers initially spooked the market but once the news settled, the realization that the overall inflation trend is downwards helped mute the negative response. Similarly, at the outset of the attacks in Jerusalem the market turned downward but recovered quickly. Although war anywhere and anytime is tragic and emotional, the market does not generally experience a sustained stock market drop with localized war. Last week also began 3rd quarter earnings with some key banks reporting and the numbers were good. Approximately 15% of the S&P 500 will report earnings this week and with it we will get a better picture of how the economy and consumers are faring.
This week Fed chairman Jerome Powell and other Fed officials will be speaking which will give us clues as to how many more rate hikes there may be. Many fed officials are taking a more dovish stance with a wait-and-see attitude before considering more rate hikes. Investors are taking notice and it’s helping to raise investor sentiment which is adding momentum to the nascent rally that began two weeks ago.
Photograph by: Marc Kleen on Unsplash
.
.
.
.
.