After yesterday’s event driven drop in the stock market, traders seemed inclined to step in and pick up some shares at reduced prices in today’s session. It is very difficult to quantify what yesterday’s global turmoil means to markets, but one thing we know is that nothing moves markets more than emotion. And yesterday’s trading was driven by emotion. As we have talked about, you can’t plan for events like that, so it’s best to just stay on course and not to overreact to such developments. One thing is certain, day’s like yesterday will happen again in the future. Events will occur that we can’t predict, and yes we will have bear markets again. Being prepared (on the proper road and driving at the right speed) is always better than overreacting.
As for today, the Dow Jones Industrial Average was up 123 points to close at 17,100. The S&P 500 was up 20 points to finish the day at 1978 (2 days in a row of more than a 1% move). Gold was down $6 to trade at $1310 per ounce, while oil was down $.15 to trade at $103.04 per barrel WTI.
A good portion of the Dow 30 and the S&P 500 companies report earnings next week, so if global events don’t overwhelm traders, then we should get a good read on this earnings season. Days like yesterday obviously distract traders from focusing on earnings. Let’s hope we can get back to the real lifeblood of the stock market next week- earnings.
Have a great weekend everyone.