Last week the S&P 500 finished at its highest price level since August. The Nasdaq also gained ground for the 7th consecutive week and is also at its highest levels since last August. In addition, the S&P 500 was able to gain 20% from its October lows from last year, which qualifies as a new bull market according to the classic definition. Although it took nearly 8 months from the lows to get to a 20% gain (in fact, that’s the slowest since 1957 to get from low to bull market status), it also one of the shortest and least painful bear markets of the past 50 years according to the Independent Vanguard Adviser newsletter, which referred to the vanquished bear market as a “Teddy Bear Market.” Yet more good vibes in the markets includes investor sentiment (from AAII) turning bullish for the first time in 16 weeks, snapping its fourth-longest bearish sentiment streak since 1987. It is also this survey’s highest bullish sentiment reading since the week of November 11, 2021. It was also the biggest one-week jump since November 2020.
Can the good vibrations continue? This week has a lot going on, including key inflation data both Monday and Tuesday, as well as the Federal Reserve decision on Wednesday. As for the expectations on both coming into the week, it is expected that inflation will continue to drop (albeit still at higher levels than desired) and that Fed will “pause” raising rates, or at least a “skip”, which means they would pause now and likely raise rates later.
Stay invested. Stay diversified. Stay disciplined.