Stocks had a strong week, particularly Tech stocks. Bonds also had a small gain. Here are the results:
| WEEK OF | 01/27/23 | ||||
| CLOSING PRICES | GAIN/LOSS | ||||
| ASSETS | 7/26/2022 | Last Week | This Week | Week | From 7/26 |
| DJIA | $31,764.00 | $33,204.00 | $33,978.00 | 2.3% | 7.0% |
| GOLD (GLD) | $160.00 | $179.29 | $179.22 | 0.0% | 12.0% |
| TECH (QQQ) | $294.30 | $282.68 | $296.25 | 4.8% | 0.7% |
| BONDS (TLT | $116.84 | $106.20 | $106.71 | 0.5% | -8.7% |
Optimism is reflected in the above table. Is it premature? Is there even a basis for it?
Little has changed in the economy. Optimism, for whatever reason, was reflected in markets. Does the market expect the Federal Reserve to take its foot off the break? That surmise, while we don’t know whether it is correct or not, is not inconsistent with the above results.
One week can be a fluke. So can a few weeks. My personal opinion is that the Fed has not yet blinked, but the last couple of weeks suggest that market participants are acting as if they expect that to happen.
Caution is still prudent. (I believe it is likely to be so for more than a few months and likely longer but no one truly knows.) Unlike prior corrections, this one could be more severe (as referenced in yesterday’s post.)
