Take a look at last week’s market recap from Joe Gallemore, CIMA® Partner & Director of Investment Management for Argent Bridge Advisors. Watch the video now!
- Over the past two weeks, markets have moved a lot, only to end up in pretty much the same spot. The S&P 500 only moved 0.04% in that time but experienced a two-day drop of over 2% in the middle.
- Two comments about this market…
- First, there is a lot of churn going on beneath the surface. Many stocks across all market caps are experiencing volatility since the market peak in May. And this could be a very good thing for actively managed strategies.
- Second, What caused this down/up, and is it worrisome?
- The 2% drop was seemingly caused by worries that a troubled real estate development company in China, potentially defaulting on its debt, would have ripple effects through China’s economy (which is the 2nd largest in the world) and seep into global equity markets. Well, this worry was short-lived as the index rebounded the following two days.
- Then the up was driven by comments from the Fed following their meeting on Thursday. The Fed admitted that they see economic growth slowing and thus don’t intend to raise interest rates soon. The stock market liked this.
- So there are lots of market forces at work right now. Lots of it is ever-present, systemic turnover of the market, and then some of it is the influence of external events such as headlines and policy way off in the future. But it is the reality of being invested and we hope this market is truly a stock-picker’s market because that favors actively-managed strategies which we employ for all clients.