Markets “In a Nutshell” for October 31, 2022
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 5.70%, the S&P 500 was up 4.00%, and the NASDAQ rose 2.20%. Foreign stocks (MSCI EAFE) were also up, rising 4.90%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.01%. (Data source: Wall Street Journal)
Market Rallies Despite Weak Tech Earnings
The market was up on all major indices this past week as yields declined to give the market hope we may have seen yields peak. Although the NASDAQ was up for the week, it trailed the Dow Jones by 3.5% on the week as some of the mega-cap tech companies released disappointing earnings. The market has been able to put together a rally in the 2nd half of October as the S&P 500 is up over 9% since October 12th. The Dow Jones is up over 14% in October alone and if it holds its current levels for one more day, it would be the best month for the Dow Jones since 1976. While this is a much different circumstance than other midterm years with a possible recession looming, stocks tend to fall at the beginning of midterm years but tend to rally in the 12-24 months after the midterm elections. Although many factors can affect the market, interest rates will continue to be the main issue for investors moving forward.
The Fed will have a meeting this week as another rate hike is expected of 0.75% to be announced toward the end of the week. This will make it a total of 3.75% that the Fed has raised rates in this year alone. This is the 2nd to last Fed meeting with the last one being in mid-December as another rate hike will be expected then. With the market already pricing in a 0.75% hike this time around, markets will pay closer attention to what Fed Chair Powell has to say about the economy and his view on how much more rates will need to rise to tame inflation. The Fed will get 2 more inflation readings before their next meeting in December which could dictate the next rate hike. The market will be hoping to hear that Powell says the Fed hiking rates are coming to a pause in the near future as that has been the major drag on markets so far this year.
Since 1915, what is the best single month percentage gain for the Dow Jones? (Scroll Down for Answer)
Have a Great Week!
3) August of 1932. In August of 1932 the Dow Jones rose by 35.76% making it the best month ever in the history of the Dow Jones.