Range-Bound: occurs when a security or index trades between consistent high and low prices for a period of time. The top of the trading range often provides a price resistance, while the bottom of the trading range typically offers price support.” - Investopedia
Last week's market recap:
- The S&P 500 closed the week up 2.62%. Year-to-date the index is up 15.78%
- NASDAQ closed the week up 3.26%. YTD the index is up 31.35%
- U.S. Aggregate Bond index was up .20% for the week. YTD the index is up 2.22%
- 10-Year Treasury Rate increased, ending the week at 3.77% up from 3.75% the prior week
- Fed Funds Target rate is currently 5.00-5.25%
- The 1-Year Treasury is yielding 5.24%
- A 6 Month Treasury is yielding 5.33%
The week ahead:
- Housing Starts and permits
- Federal Reserve Chair, Jerome Powell’s semiannual testimony on monetary policy
- Purchasing Managers’ Index (PMI)
Is this the start of a bull market?
Possibly, but in the short term we may be range-bound. Coming out of a bear market, multiples tend to go up because earnings are low. Multiples and stocks tend to move higher before earnings, which lead the economy. It looks like this is what we are seeing right now, but it’s too early to claim victory.
The full effects of rate hikes have yet to be felt and sticky inflation may keep interest rates higher for longer than most expect. This would be a headwind for crossing into higher highs, but it doesn’t mean we’re going to have a big pullback. So “range-bound” seems to be likely scenario in the near term. This means we may see opportunities across stocks, bonds, and alternatives in the coming months.
As always, let us know if you have any questions.
CRA Investment Committee
Matt Reynolds CPA, CFP®
Tom Reynolds, CPA
Robert T. Martin, CFA, CFP®
Gordon Shearer Jr., CFP®
Jeff Hilliard, CFP®, CRPC®
Joe McCaffrey, CFP®
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