Market Notebook

by | Nov 13, 2022

Discussion – 

Equity prices, as measured by ticker SPY, and bond prices, as measured by ticker BND, closed higher on the week.

SPY and BND prices closed above their respective 20-day exponential moving averages. SPY held above the 20-day on strong price action and above the November 3rd “higher low,” suggesting a short-term upward trend has been established.

BND also closed the week above the 20-day exponential moving average. This is the first time it has done so since mid-August. Last week’s close is a possible sign that the long-established downward trend in BND may end.

The week-over-week change in sentiment appeared whiplash-inducing. Inflation data came in cooler than expected, fueling market participants’ appetite for risk assets.

Although inflation data came in cooler than expected last week, inflation in the U.S. remains elevated. The Fed will likely remain aggressive in combating inflation. The apparent key to a sustained risk rally is a sustained change in sentiment regarding rate hikes. This dynamic was on display during last week’s trading.

Technical analysis on a daily timeframe for both SPY and BND suggests the possible establishment of an upward trend. Additionally, recent price declines have improved the price-to-value ratio for many instruments. Next week could be an opportunistic week to pick up specific equity and bond instruments.

All the best during 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.