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.
We are always looking for what will be the next catalyst that will take the markets and your portfolio up. The next market catalyst could come if earnings catch up to price and make the market less expensive. The big negative risk will be if price drops to where earnings are. However, technology could be the market catalyst we are looking for.
This week should give investors an idea of where the market is going and what could cause their portfolio to increase. We believe that the Fed is on the back burner which could allow the market to continue to rally.
It will be a big week with corporate earnings and the Republican convention kicking off. The question is, “Can this market momentum keep going?” We’ve had a lot of great economic numbers come out in the past few weeks. Donald Trump’s policies could either make the markets more or less skittish.