Unfortunately, the bounce we saw yesterday, quickly disappeared at the opening this morning as the bears are firmly in control of the situation at the moment. Sentiment has turned decidedly negative, as economic data is weak (today’s PPI indicating that inflation is not evident), yet Fed officials keep sabre rattling about coming rate hikes as if they are Don Quixote tilting at windmills. Nevertheless, as we pointed out in our quarterly outlook, the Fed is likely to be a headwind for stocks this year.
As for the markets, by the close the Dow Jones Industrial Average was down 390 points to finish the day at 15,988. The S&P 500 was down 41 points to close at 1880. Gold was up $15 to trade at $1089 per ounce, while oil was down $1.54 to trade at $29.66 per barrel WTI.
Once again, what was a stealth bear market is becoming abundantly apparent at the moment, and it appears that earnings season is not likely to be a savoir at this point. Now, perhaps stocks prices are already discounting the bad news, but we will see. I’ll leave you with a couple of thoughts from noted investment gurus as we enter the three day weekend. First from Warren Buffett- “Be fearful when others are greedy. Be greedy when others are fearful.” Also, from Shelby Davis – “you make most of your money in a bear market; you just don’t realize it at the time”.
Have a great holiday weekend everyone and we’ll talk to you next Tuesday.