MONTHLY MARKET REVIEW
US stock prices sunk in what was a myriad fourth-quarter and especially dour December. From October’s peak to December’s bottom, the S&P 500’s index level had fallen almost 15%.
The exasperation in international stock markets are in lockstep with the US stock market’s pursuit to find a new bottom. As a whole, broader international stock markets are nearing correction levels this year.
The S&P 500 nearly lost 10% between September 20th and October 29th. At its worst moment, year-to-date gains flipped from being positive to being negative.
US and international stock market divergence certainly has investors wondering about US stocks.
In the backdrop for US stock performance has been another quarter of excellent profit growth.
Now, the US economy is being described as having the best of many worlds. Real growth has gained altitude while inflationary trends are fairly stable.
The Federal Reserve Bank has been primarily focused on containing inflation, but now they may have to get ahead of it.
Italian bond yields rose swiftly to multi-year new highs when the Italian president refused to swear in a trained economist and Eurosceptic as Italy’s next finance minister.
In a deliberate attempt to get ahead of the inflationary curve, the US central bank and fixed-income market participants are causing US interest rates to rise.
The growing trade deficit of the US has come under increased scrutiny as of late. Notably, the trade deficit now runs around $653 billion annually and continues to grow.
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