Today was a tough day across the board for the major indexes as investors weighed the coming realization of the end of quantitative easing. Also, the markers were a bit spooked by the fact of Russia potentially looking to seize foreign assets. However, even more importantly is the fact that the S&P 500 blew through the 50-Day moving average with relative ease, which leaves it kind of in between a rock and a hard place. Some will be fast to point out that we are still only 3% off of our highs, but for the better half of the year we didn't even hardly drop below the 21-Day moving average. Behind the surface there was a fairly substantial rotation out of small caps and into large caps. It is yet to be determined whether this is just a seasonal issue and a sector rotation or the beginning of a deeper and long awaited market pullback.
There is an old saying--"The trend is your friend," and one day certainly doesn't make a trend, but today is a good example of what I like to call a day to take notice. High Yield bonds were also spooked by some comments out of one of the Fed presidents leading to a fairly substantial movement lower. However, the safe haven of Treasuries turned out to be one of the few places to hide today along with some of the metals.
Tomorrow we get GDP numbers, which should be stronger than last quarter.
It's days like today that really make you want to understand what you own in your portfolio and how market conditions effect different asset classes. We are always here to provide a complimentary second opinion of your portfolio.
Until the next time...
Eric Marvin
M&M Wealth Management, LLC
CEO & Co-Founder
239-288-6542
Past performance is no guarantee of future results. Please always consult your financial advisor with questions pertaining to your specific situation.
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