The Week on Wall Street
Modest gains in major market indices masked sharp volatility amid the uncertainty arising from mixed messages emanating from public officials and revived banking fears.
The Dow Jones Industrial Average gained 1.18%, while the Standard & Poor’s 500 added 1.39%. The Nasdaq Composite index rose 1.66% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, advanced by 3.29%.1,2,3
A Turbulent Week for Stocks
The stock market was unable to find sustained direction as investors weighed comments from Fed Chair Jerome Powell and Treasury Secretary Janet Yellen. Stocks initially rose as banking fears eased following a deal to acquire a troubled Swiss bank. Optimism was further fueled by Yellen, who said the government could intervene to protect depositors if more bank issues materialized.
Enthusiasm faded, however, when Yellen subsequently testified that the Treasury was not working on any blanket insurance for bank deposits and by the Fed’s warning that banking turmoil could shrink lending access — the volatile week ended with sharp intraday price swings, shrugging off revived European banking concerns.
Rate Hike Cycle Ending?
Last week, the Federal Open Market Committee (FOMC) meeting was particularly noteworthy. Fed officials were placed in the difficult position of balancing the banking system’s opposing risks of still-high inflation and stressors. The Committee had considered leaving rates unchanged given banking stressors but unanimously voted to raise rates by 0.25%, citing elevated inflation, resilient economic activity, and a strong labor market.4
The official announcement hinted that the Fed might soon be done with raising rates while also stating it was too early to ascertain the degree to which the economy could slow from the current banking strains.5
T H E W E E K L Y R I D D L E
Name three consecutive days without using the words Monday, Wednesday, Friday, or Sunday.
LAST WEEK’S RIDDLE: Five girls took part in a bicycle race. Barbara finished before Vicki but behind Susan. Katarina finished before Sara but behind Vicki. In what order did they finish?
ANSWER: 1-Susan, 2-Barbara, 3-Vicki, 4-Katarina, 5-Sara.
Q U O T E O F T H E W E E K
“Self-love is not a destination […] You’re always bucking against the current to just get back to the thing you were born with, which is a basic level of self-respect and self-love.”MELISSA VIVIANE “LIZZO” JEFFERSON
John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)