After last Monday's violent rout, stocks had an incredible comeback and ended the week almost completely reversing all of its weekly losses - the S&P 500 was just 0.04% lower, the Dow Jones was down 0.6% and the Nasdaq lost 0.18%, which was the most volatile week of 2024. The main culprits for the market volatility seem to stem from 1.) disappointing employment data from the prior week and 2.) concerns that the Federal Reserve was too late to cut interest rates. At Monday's lows, stocks were down 10% from their all-time highs. But, investors stepped in and bought the dip on the notion that another crisis or recession was not on the horizon. The week’s earlier losses were, also, tied to the unwinding of a long-time bet on cheap Japanese yen, called a carry trade, rather than fundamental threats to the economy. Hopefully, the recent market activity has no bearing on the long-term outlook for either financial markets or the overall economy.
Economic reports from last week came back mixed:
•Consumer Credit - higher than expectation
•Jobless Claims - lower than expectation
This week, investors will look for guidance from economic reports like Small Business Optimism, Inflation, Retail Sales, Manufacturing, Housing, Consumer Sentiment and Jobless Claims.
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