After a historically strong start to the year, markets have now pulled back 2.5% to begin the second quarter. Concerns around geopolitical tensions in the Middle East, inflation, corporate earnings, and other issues have led to a market decline, pushing the VIX index of stock market volatility to its highest level in six months. In times of market stress, it’s important for investors to maintain perspective on the critical issues and not overreact to headlines. How can investors understand and weather this period of market volatility?,
Markets continue to be driven by artificial intelligence stocks and the timing of the Fed's first rate cut. Beyond the day-to-day swings, these drivers reflect important trends in innovation, productivity, and the health of the economy.
With the presidential election season heating up, there will no doubt be a flurry of daily headlines between now and election day on November 5. A rematch between Joe Biden and Donald Trump seems inevitable with Trump currently leading many presidential polls among registered voters while Biden is raising and spending more campaign funds.
The stock market continues to reach new heights, driven by a stronger-than-expected economy and the largest technology stocks. In particular, Nvidia, a maker of graphics chips used in artificial intelligence applications, recently helped to push markets higher after it beat Wall Street earnings expectations. This has added to the gains made by the group known as the Magnificent Seven which consists of fast-growing technology companies, many of which have market capitalizations of a trillion dollars or more.
March 2024 Economic Update
When it comes to markets, day-to-day price swings are often more about what investors expect than the underlying facts. This is because markets are designed to anticipate future events and assign them a price today. This gap between reality and expectations has driven stock and bond market volatility in recent days due to the Fed's latest announcement and headlines in the banking sector. What should investors know about these developments to stay focused on the long run?
The past year has shown us that it's important to stay invested and diversified across all phases of the market cycle, rather than try to predict exactly what might happen on a daily, weekly, or monthly basis.
Article by James Liu, CFA. Founder and Head of Research Clearnomics. The author F. Scott Fitzgerald once wrote that "the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function." This concept, often referred to as "cognitive dissonance," is something all investors must grapple with on a regular basis. This is because financial markets can swoon seemingly without...
