Historically, the markets react differently after a presidential debate depending upon who it perceives as the debate winner. Regardless of who your candidate is, the market will respond with its own perception. Here is what we believe could happen in either scenario.
The markets can be viewed as a football field. You may have your portfolio or team on the field. The Fed is the referee and the Fed can pull out the flag and call a penalty. We are seeing a lot of market volatility because the Fed has been making a lot of penalty calls recently, especially on this past Friday.
The S&P 500 has currently gone 40 sessions without as much as a 1% move up or down. There is no crisis to fix and this is creating bored and dangerous investors. There is a difference between a bored and a shrewd investor.
Investors are frustrated over the market uncertainty that is being created by the Fed. The Fed seems to be playing a word game which is hurting the markets and creating market volatility. More in the video.
This week all investors need to watch the Fed. There is a lot going on with the Fed as Janet Yellen and the Fed governors will be meeting in Jackson Hole, Wyoming. Some new information has come out recently that points toward December as the next time we could see the Fed raise interest rates. Yellen could come out this week with the news that it could be as early as September.
In the current jobs number data we see a wage increase and evidence that the consumer is spending more in the economy. These and other factors are creating the best opportunity to drive market growth through the end of the year.