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Mixed Indices in a Bloody Week: Are We Nearing a Bottom?
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Market indices closed mixed — yes, mixed! hooray! — this Thursday, as the bearish freefall tempers a tad. We’re still way down for the week, but at least the Nasdaq buoyed +0.059% and the small-cap Russell 2000 posted real gains of +1.24% on the day. It’s doubtful anyone has the guts to call a bottom in the market at this particular moment; suffice it to say green shoots are always welcome on scorched earth.
Meanwhile, the Dow lost another -103 points, -0.33%, while the S&P posted a marginal loss of -0.13%. The blue-chip index is now -2.5% over the past five trading days and -8.2% in the past month, consisting of more than half the year-to-date losses of more than -13%. The S&P is -3.5% for the week, -11.6% for the month and -18% year to date. The Nasdaq is -5.4%, -16.7% and -28.2%, respectively, and the Russell is -4.7%, -14.1% and -23.5%.
In short, the market’s seen better days. That goes for crypto, as well: Bitcoin , down another -1% today, is -19% in the past week, -28.4% in the past month and -39.9% year to date. And that’s a drop in the bucket compared to Ethereum : -29.8% in just the past five sessions, -50.4% in the past month and -46% year to date. That’s basically the mirror image of the U.S. Oil ETF (USO - Free Report) , +44.5% year to date, but even that is -3% in the past week.
We knew we’d be finding answers to the many questions we had when markets really started sliding in the last couple weeks of April, and we certainly have: Are inflation metrics abating? Barely. You need a microscope to see them. Is the Fed ramping up interest rates to successfully combat inflation? Again, barely. And Fed Chair Powell said again today a 75-basis-point hike is not on the table through this summer. We’ve all got our fingers crossed our eventual 2.00% Fed funds rate will sop up a lot of this excess.
Keep going: Is China over Covid? Heck no, so don’t expect supply chain issues from there to notably abate anytime soon. Is the rest of the world over Covid? Nope. It’s a mild case most vaccinated people are getting these days, but it’s still with us. Is the Ukraine war almost over? Don’t kid. Putin is now saber-rattling at Scandinavia for their moves toward joining NATO. Gas prices coming down? Maybe per barrel, slightly, but not at your neighborhood filling station.
Eventually, we’ll see things turn around. At this stage, frustration will only beget missed opportunities when they arise. And they will arise. Look at it this way: Apple (AAPL - Free Report) shares may be falling off a cliff — down -8.7% in the past five days — but it’s arguably the most important company on earth; there’s only so far it can possibly drop.
There’s a saying in economics: “Trees don’t grow infinitely to the sky,” meaning there’s a natural force keeping entities from growing too massive. The same applies on the other side of the spectrum: the stock market is not going to zero. This doesn’t mean we advocate buying everything in sight this very second, but based on your risk appetite, length of investment, etc., it should become apparent when a stock is priced attractively enough to buy it.
Back to Apple: it’s -22% year to date — is something like this somewhere on your wish list?
Image: Bigstock
Mixed Indices in a Bloody Week: Are We Nearing a Bottom?
Market indices closed mixed — yes, mixed! hooray! — this Thursday, as the bearish freefall tempers a tad. We’re still way down for the week, but at least the Nasdaq buoyed +0.059% and the small-cap Russell 2000 posted real gains of +1.24% on the day. It’s doubtful anyone has the guts to call a bottom in the market at this particular moment; suffice it to say green shoots are always welcome on scorched earth.
Meanwhile, the Dow lost another -103 points, -0.33%, while the S&P posted a marginal loss of -0.13%. The blue-chip index is now -2.5% over the past five trading days and -8.2% in the past month, consisting of more than half the year-to-date losses of more than -13%. The S&P is -3.5% for the week, -11.6% for the month and -18% year to date. The Nasdaq is -5.4%, -16.7% and -28.2%, respectively, and the Russell is -4.7%, -14.1% and -23.5%.
In short, the market’s seen better days. That goes for crypto, as well: Bitcoin , down another -1% today, is -19% in the past week, -28.4% in the past month and -39.9% year to date. And that’s a drop in the bucket compared to Ethereum : -29.8% in just the past five sessions, -50.4% in the past month and -46% year to date. That’s basically the mirror image of the U.S. Oil ETF (USO - Free Report) , +44.5% year to date, but even that is -3% in the past week.
We knew we’d be finding answers to the many questions we had when markets really started sliding in the last couple weeks of April, and we certainly have: Are inflation metrics abating? Barely. You need a microscope to see them. Is the Fed ramping up interest rates to successfully combat inflation? Again, barely. And Fed Chair Powell said again today a 75-basis-point hike is not on the table through this summer. We’ve all got our fingers crossed our eventual 2.00% Fed funds rate will sop up a lot of this excess.
Keep going: Is China over Covid? Heck no, so don’t expect supply chain issues from there to notably abate anytime soon. Is the rest of the world over Covid? Nope. It’s a mild case most vaccinated people are getting these days, but it’s still with us. Is the Ukraine war almost over? Don’t kid. Putin is now saber-rattling at Scandinavia for their moves toward joining NATO. Gas prices coming down? Maybe per barrel, slightly, but not at your neighborhood filling station.
Eventually, we’ll see things turn around. At this stage, frustration will only beget missed opportunities when they arise. And they will arise. Look at it this way: Apple (AAPL - Free Report) shares may be falling off a cliff — down -8.7% in the past five days — but it’s arguably the most important company on earth; there’s only so far it can possibly drop.
There’s a saying in economics: “Trees don’t grow infinitely to the sky,” meaning there’s a natural force keeping entities from growing too massive. The same applies on the other side of the spectrum: the stock market is not going to zero. This doesn’t mean we advocate buying everything in sight this very second, but based on your risk appetite, length of investment, etc., it should become apparent when a stock is priced attractively enough to buy it.
Back to Apple: it’s -22% year to date — is something like this somewhere on your wish list?
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