Friends
As we mentioned earlier in the week, after an event like we had with a couple of bank failures it is very likely that we will see heightened volatility in the markets. I mentioned that at least for a day market participants seemed to be calmed just a bit yesterday, but just a day later there once again was concern over the banking industry as a whole and just what that means for not just bank stocks, but the markets and the economy as we move forward.
Stocks fell from the opening bell and could never really recover. By the close the Dow Jones Industrial Average was down 384 points to finish the day at 31,861. The S&P 500 was down 43 points to close at 3,916. The Nasdaq Composite Index was down 86 points (but still up nicely for the week) to close at 11,630. Gold was up $59 to trade at $1,981 per ounce, while oil was down $2.14 to trade at $66.21 per barrel WTI. The big move of the week was in bonds as yields collapsed in a manner we haven’t seen in decades.
Investors are trying to figure out what the fallout in the banks means for the economy as a whole and the possibilities are not very good. How will the Fed react to all of this next week? The FOMC meeting concludes on Wednesday with the statement and the Fed Chair’s press conference to follow. I really don’t know what the Fed will do. I am sure that a half point raise is out of the question at this point, but a quarter point raise still seems possible. If it was me, I would pause. I think the markets are doing the Fed’s work for them at this point. They might be worrying about things slowing too quickly soon enough. So much for that hot economy and stubborn inflation. It will be an interesting week ahead. Stay tuned.
Have a great weekend everyone.
