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Where’s the holiday cheer on Wall Street?

Where’s the holiday cheer on Wall Street?

December 21, 2021
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The stock market hasn’t been feeling very festive lately. In the last few days, I’ve observed a very dour tone on Wall Street with stock market declines mirroring this mood. This reminds me of how the market was at the end of September when the U.S. was feeling the effects of the Delta variant, watching the looming government shutdown, and reading economic reports that were below expectations. The current negative news includes the omicron variant, probable failure of passing the Build Back Better Act, high inflation, and a Federal Reserve that will need to raise interest rates. Do you see the similarities? Basically, it’s a repeat story – pandemic, government, and economic concerns, and both at the end of the quarter. However, a negative September led to a very positive October with strong corporate earnings and new highs in the stock market. Let’s see if January will provide the same relief to this shaky December.

On a brighter note, last week we saw the power of global diversification at work. The major U.S. stock indexes were down 1.5% to 3% but international indexes were up 0.5%. Having domestic and international holdings in a portfolio equaled less volatility and less of an overall drop in portfolio value.

Photograph by: Ellie Lord

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