What comes next?
The U.S. stock market tends to be a forward-looking vehicle. Investors make decisions today based on what they think may be ahead for the economy, and how economic change may affect the companies they’re considering for investment. Currently, key questions include:
Opinions about the answers to these questions vary, and that’s one reason markets have been volatile lately. For example, some think the U.S. economy is headed for:
It’s important to remember the economy is not the stock market. It is just one of the many factors that influence share prices. Each of the economic possibilities would affect share prices and market sectors differently.
With so much uncertainty, it’s hard to know what will happen. As baseball great Yogi Berra said, “It’s tough to make predictions, especially about the future.” That’s why it’s a good idea to hold a well-allocated and diversified portfolio that targets your financial goals.
Last week, major U.S. stock indices finished lower, and the Treasury yield curve remained inverted.
Data as of 12/9/22 | 1-Week | Y-T-D | 1-Year | 3-Year | 5-Year | 10-Year |
Standard & Poor's 500 Index | -3.4% | -17.5% | -15.7% | 7.9% | 8.1% | 10.7% |
Dow Jones Global ex-U.S. Index | -0.5 | -17.4 | -16.7 | -0.4 | -0.7 | 2.0 |
10-year Treasury Note (yield only) | 3.6 | N/A | 1.5 | 1.8 | 2.4 | 1.6 |
Gold (per ounce) | 0.6 | -1.3 | 1.1 | 7.1 | 7.6 | 0.5 |
Bloomberg Commodity Index | -2.4 | 12.7 | 15.7 | 14.8 | 5.8 | -2.4 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
Holidays can be wonderful, and they can be a lot. If the joy of the season is eclipsed by stress, anxiety or depression, here are some tips that can help.
We hope you have happy and healthy holidays!
“Kindness in words creates confidence. Kindness in thinking creates profoundness. Kindness in giving creates love.”
—Lao Tzu, philosopher
Sources:
https://www.investopedia.com/how-stock-market-affects-economy-5296138
https://www.bloomberg.com/news/articles/2022-11-15/bofa-survey-shows-stagflation-fears-with-no-fed-pivot-in-sight (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/121222_Bloomberg_BofA%20Survey%20Shows%20Stagflation%20Fears_3.pdf)_
https://www.bloomberg.com/news/articles/2022-11-23/fed-staff-saw-odds-of-us-recession-in-next-year-as-about-50-50 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/121222_Bloomberg_Fed%20Staff%20Warn%20Chance%20of%20Recession%20now%2050%20Percent_4.pdf)
https://www.goodreads.com/quotes/261863-it-s-tough-to-make-predictions-especially-about-the-future
https://www.barrons.com/articles/stock-market-fed-meeting-51670633736?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/121222_Barrons_The%20Stock%20Market%20Had%20a%20Terrible%20Week_6.pdf)
https://www.sciencedaily.com/releases/2022/10/221005141751.htm
https://www.verywellmind.com/maintain-a-sense-of-humor-3144888
https://www.apa.org/news/press/releases/2020/09/doing-good-boosts-health
https://www.beyondfinance.com/newsroom/beyond-finance-2022-holiday-financial-stress-survey/ https://www.goodreads.com/author/quotes/2622245.Lao_Tzu