January 27th Weekly Market Update
Last week the stock market slid 2.6%, reacting negatively to some mixed readings on global economic growth along with pressures on emerging market countries associated with the Federal Reserve’s (Fed) tapering of its bond-buying program. While we believe global economic growth is improving, the data rarely strengthens in a straight line.
We continue to believe these “scare markets”— temporary pullbacks driven by growth concerns, rather than bear markets driven by a broadly deteriorating environment for the economy and profits — may be more common this year as volatility rises from the business cycle low point reached last year. Although it can be painful to see markets fall for any reason, it is somewhat comforting that the vicissitudes of Washington politics are not the driver of the decline.
President Obama’s State of the Union (SOTU), scheduled for Tuesday, January 28, is unlikely to be a big market mover. In fact, most SOTU speeches see less than a 1% move in the stock market on the following day, and the average move is only 0.15%
For the full article: Investor’s Guide to the 2014 State of the Union Address