Hope you are all doing well. Each of the major U.S. indexes posted a gain of around 2% as stocks rebounded from a setback the previous week, when indexes fell more than 2%. Stock trading was bumpy amid big price moves for assets such as cryptocurrencies and gold. The weekly gains came despite anxiety over trade policy and regional bank lending risks. The anxiety did cause sizable intraday market swings but the direction was still positive. The Volatility Index on Friday morning briefly reached its highest intraday level since April before settling down in the afternoon. Kiss guitarist, Ace Frehley, passed away this week. I have broken down this week’s update using songs from their album, Destroyer.
Great Expectations
The major U.S. banks kicked off earnings season. Despite elevated expectations, they exceeded analysts’ third-quarter profit and revenue forecasts. The beat comes thanks in large part to rising investment banking income. Analysts now project that financial services sector earnings rose at 18.2%. That is 8.5% above the expected growth forecast across all sectors in the S&P 500. This is a great start. If we have another strong earnings season, it could be a catalyst for the next leg higher in stocks.
Sweet Pain
The price of Bitcoin briefly fell on Friday morning to its lowest level in three months before modestly rebounding in the afternoon. Bitcoin slipped below $104,000. Painful when you consider that it is 17% below a record high of more than $126,000 reached less than two weeks earlier, on October 6. However, not too bad when considering at the start of 2023 it was around $16,500.
Shout It Out Loud
To paraphrase the song, just forget the things that you’ve been told. Tariffs were supposed to drive up inflation. We will get a new read on the Consumer Price Index (CPI) this coming week. However if you have been to a gas station lately you may have noticed the one price that impacts people and businesses the most has come down. The price of U.S. crude oil fell for the third week in a row and sank on Friday to the lowest level in more than five months. Oil briefly traded below $57 per barrel before rebounding in the afternoon. Concerns that an oil supply glut is forming and a weakening economic outlook has contributed to the decline in oil prices.
As this is a time of anxiety for many of you, I have opened up additional hours this week on my calendar. Please use my calendar link below and schedule a phone or zoom appointment. The calendar link allows you to schedule a call as early as the next day. If it has been a while since your last review, please schedule. Please also note that because this is a busy time, calls and emails may take longer to respond to. The calendar link has a 15 minute appointment option. If it is something you need done promptly it is best to schedule a 15 minute appointment.
