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Especially Exciting Week in Markets

The week ended November 4 was especially exciting. Chairman Powell announced another 0.75 basis point increase last Wednesday, expected by markets. Interestingly, markets appeared to ignore his announcement with an initially powerful move upward. Powell’s post presser drove them down dramatically.

Markets meandered through the rest of the week, although precious metals and other hard assets rose dramatically on Friday! Here is the summary:

WEEK OF 11/04/22
CLOSING PRICES GAIN/LOSS
ASSETS 7/26/2022 Last Week This Week Week From 7/26
DJIA $31,764.00 $32,838.00 $32,268.00 -1.7% 1.6%
GOLD (GLD) $160.00 $152.91 $156.61 2.4% -2.1%
TECH (QQQ) $294.30 $282.02 $264.46 -6.2% -10.1%
BONDS (TLT $116.84 $96.80 $94.45 -2.4% -19.2%

GLD was the only positive for the week. Since the Fed began its four consecutive 0.75% point rate increases, this asset and the Dow Jones have outperformed Tech (down 10.1%) and Bonds (down 19.2%).

Fed action is affecting markets, but as yet, not in the traditional manner (at least on the longer term record). Results for the week are more representative in that gold was strong and stocks and bonds were weak.

The effect of elections tomorrow is likely to dominate this week’s action. However, the explosion in hard assets on Friday was impressive.

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