Friends
Although stocks did finish well off their lows, it was another bad day and bad week for the bulls. Negativity, as we move into the holidays is at a peak with the narrative being that there is really no way that we avoid a painful recession in 2023. Indeed, almost on a daily basis we are getting economic data that shows the economy slowing. Yes, the Fed sees this same data, but they are between a rock and a hard place (a position that they got themselves into). They have to continue to talk tough about inflation so as not to be seen as caving before the job is done, but at the same time they are helping push the economy towards recession. The question for investors is are stocks already priced for recession or is there more work to do? The recession narrative is not new. Negativity has ruled Wall Street most of 2022. And remember, stocks usually begin to recover long before a recession has ended. The problem is that we keep waiting for this one to really begin (unemployment is still at 3.7%).
Anyway, as for today by the close the Dow Jones Industrial Average was down 281 points to finish the day at 32,920. The S&P 500 was down 43 points to close at 3,852. The Nasdaq Composite Index was down 105 points to close at 10,705. Gold was up $16 to trade at $1,803 per ounce, while oil was down $1.82 to trade at $74.29 per barrel WTI.
It’s really been a difficult couple of weeks for the bulls. A lot of work was done to get the market averages back to a level that reflected more moderate losses for the year. Now we see the S&P down close to 20% again year-to-date. Let’s hope the jolly man in the red suit can bring some presents for the bulls in the next couple of weeks in the form of a Santa Claus rally. With the negativity that persists it’s hard to imagine that happening. But maybe that’s exactly why it will. We will see.
Have a great weekend everyone.
