Yes, I am back, and yes, the Dow dropped more than 400 points immediately at the open of trading this morning. Coincidence? I think not. Fortunately, market participants decided to buy this morning’s early downturn and pushed stocks higher during periods of the trading session. Though the bulls couldn’t move the market into the green for today’s session, they were able to keep the Dow and the S&P just barely in positive territory for the month of May. That alone is amazing given where we have been over the past 31 days.

By the close, the Dow Jones Industrial Average was down 222 points to finish the day at 32,990. The S&P 500 was down 26 points to close at 4,132. The Nasdaq Composite Index was down 49 points to close at 12,081. Gold was down $15 to trade at $1,835 per ounce, while oil was up $.20 to trade at $115.27 per barrel WTI.

It has been a very challenging first 5 months of the year for market participants. Stocks and bonds are both down double digits and sentiment, both consumer and investor, has plummeted. The headwinds that we have talked about since late 2021 are blowing full force now. Inflation might be topping but still is rampant and the Federal Reserve is no longer our friend. Interest rate hikes have begun, and quantitative tightening will begin imminently. We have mentioned that moves higher like we saw last week will continuously be seen as bear market rallies until proven otherwise. I still think this bear market is as much or more about time than it will be about price. The Fed monetary pivot and its battle against inflation will unfold before our eyes over the coming months. How long it takes to unfold remains to be seen. Is a recession in our future (and by the way is that even a bad thing given that the natural occurrence of cycles has been distorted by easy monetary policy and periodic resets are actually a healthy part of capitalistic economic cycles- a cleansing if you will)? Buckle up, it appears we still have some work to do to get to the other side of this bear market.

Have a nice evening everyone.

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