Market Notebook

Prices of U.S. equities moved slightly higher last week while bond prices continued in a downward trend.

As measured by ticker SPY, U.S. equities appear to be in consolidation. This is welcome news and allows for cautious optimism. As mentioned during the past few weeks, caution is warranted due to inflationary pressures and potential disruptions in the real economy due to supply chain constraints. Nonetheless, the fact that equities appear to be in consolidation means there may be some opportunities worth exploring. If purchases are made, caution can be exercised by limiting investment size.

As measured by ticker BND, Bonds appear to be in an extended downward trend. It continues to seem prudent to avoid bond purchases for the time being unless necessary.

Be on the lookout for news events that are possible but considered unlikely. Such news events have the power to create volatility in markets. Examples might be an agreement for the cessation of hostilities in Ukraine or sharp moves lower in oil prices. Those things are not expected but are possible. If they come to pass, market participants would have to rethink existing strategy, and such rethinking would likely translate into market volatility.

All the best in the week ahead.

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.