Taking stock of the market’s roller coaster week

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The roller coaster ride of the stock market this week was real.

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why it matters: This year was on pace to achieve a rare milestone: 12 full months without a pullback more than 5% In the S&P 500 – helped it move up this week.

  • The stock has already made up for about half of those losses.

here is a snapshot

  • The stock has alternated between gains and losses of at least 1% for most of the past week – the longest wild stretch since June 2020. according to bloomberg.
  • As a sign of a temporary debt ceiling truce on Wednesday, shares staged their biggest afternoon return since February.
  • Strategists say Thursday allayed fears about a federal loan default-driven profit (though, of course, no one can say for sure why the stock market does the way it does).
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Flashback: September is generally not a good month for the stock market wasn’t even this year) Historically, October not much Better.

  • “The risk is lower at this time of year: people don’t want to lose money for any reason at the end of the year,” says Rick Ryder, BlackRock’s chief investment officer at Global Fixed Income.

in addition to the calendar, goes back and forth about how big things will be on the latest worry list – such as a long period of high inflation.

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What are they saying: “The number one question we get from clients is whether inflation is temporary or stays with us,” Omar Aguilar, chief investment officer at Charles Schwab, told Nerdshala.

  • “People are more concerned about it than they were a few weeks ago,” Aguilar says. Not helping: Supply chain flair that is getting worse and commodity prices have jumped in recent days.

Then there’s the impending taper. The Federal Reserve isn’t exiting the game entirely, but it will largely ease bond purchases, which have helped shore up stocks. No one yet knows at what speed the Fed will do it.

  • “The Fed is going to take their foot off the accelerator a little bit, so instead of going 125 mph, they’re going to go 100 mph. It’s still faster,” Wells Fargo Investment Institute Scott Wren, global equity strategist.

big picture: The S&P 500 is up nearly 50% from its pandemic-era low.

  • And for every market watcher who says the risk is too high, there is another who says there is no fear.

What will happen next: Earnings start picking up from next week onwards.

  • The number of companies asking Wall Street to lower profit expectations has risen over the past quarter, according to factset.
  • Still, they are no more than those who have said there will be upcoming results. Even better than the initial forecast.

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