The stock market was down moderately last week but has remained in a relatively narrow price range for the past month. In other words, stock market volatility has declined considerably in the last quarter of 2022. This week there will be two events which will possibly push the market out of its current range. First is the release of an important inflation report, and second is the conclusion of the Federal Reserve meeting.
This week’s economic data will be the last major market moving data of 2022 and will be followed by a relatively quiet three weeks, through the holiday season, until the release of the jobs report on January 6th. Over the last month I believe investors have settled into a relative acceptance of inflation, rate hikes, and the unknowns of 2023.
My analysis of market sentiment currently, and looking into the new year, is that most investors are bracing for a recession and continued stock market weakness in 2023. There’s often an anticipated Santa Claus rally during these couple of weeks leading up to Christmas, but it doesn’t seem like investors are expecting any presents this year. However, it’s important to remember that what the majority is anticipating on Wall Street is wrong as often as (or more than) it’s right, and future economic events often unfold in unanticipated ways.
Have you had any unanticipated end of the year financial hurtles or windfalls you’d like to discuss? Let’s schedule a chat before the holidays are upon us. Contact me now.
Photograph by: Kimon Maritz on Unsplash
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