Market Notebook

by | Apr 24, 2022

Discussion – 

Both US equity and bond prices closed lower again last week.

U.S. equity prices, as measured by ticker SPY, experienced a significant pullback on Thursday and Friday of last week on apparent inflation concerns and thus concerns that the Federal Reserve will hike rates higher and faster than previously thought.

A couple of bombshells in tech land appeared to add to last week’s volatility in equity prices. Netflix reported its first subscriber loss in nearly a decade, sending shares sharply lower. In addition, the battle for control of Twitter appeared to heat up as Elon Musk supposedly secured enough capital to go forward with a tender offer for Twitter shares.

From a technical analysis standpoint, as measured by ticker SPY, U.S. equity prices have established a short-term downward trend within a longer-term area of price consolidation. Eyes are on the February 24th lows with the idea that prices at that level could provide technical support for equity prices. It seems possible that the February 24th lows could be tested in the week ahead. It seems prudent to steer clear of equity purchases over the near term unless necessary or unless an opportunity comes along that is too good to pass up.

Broken record bonds remain in what appears to be a strong downward trend. Bond purchases should likely be avoided unless necessary.

A friendly reminder that price pullbacks are features of markets and not bugs. Investors endure the down days to take advantage of the up days.

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.