The S&P 500 has experienced the longest bear market in almost 50 years, but strong earnings from corporations have helped it stay afloat with two consecutive months of gains. Investors are anxiously waiting for the Federal Reserve’s monetary policy decisions, and some are hoping for a “soft landing” despite weak economic numbers.
Ladies and gentlemen, step right up and feast your eyes on the ongoing saga of the S&P 500 bear market! It’s been 221 days of nail-biting excitement as the market dips over 20% from its peak, making this the longest bear market stretch since 1973. But wait, there’s more! It’s even beating out those pesky dot-com bubble and 2008 financial crisis plunges.
Now, what could possibly be keeping some of our optimistic investors afloat during these “bearish” times? Well, it seems that strong earnings from America’s biggest corporations have been the life preserver for the S&P 500, managing to keep its head above water and achieving its second consecutive month of gains. Bravo, capitalism.
Let’s take a closer look at our intrepid S&P 500’s journey. It closed at 4,184 on April 27, 2022, and a year later on April 28, 2023, it closed at a cozy 4,170. Not too shabby, considering the rollercoaster ride it’s been on. Earnings? Better than expected. Volatility? Declining like a graceful swan dive. So, what’s got investors biting their nails and pacing back and forth?
Well, pull up a chair and let me whisper in your ear the two words on everyone’s lips: Federal Reserve. That’s right, these investors are waiting with bated breath to see if the Fed pulls the rug out from under its quantitative tightening. The cherry on top of this suspenseful cake? The central bank is expected to raise interest rates at its May meeting, and some investors are betting it’ll start trimming rates later this year.
Some folks are putting their eggs in the basket of Federal Reserve Chairman Jerome Powell, hoping he won’t slam on the monetary brakes too hard this time around. It seems these eager beavers still harbor dreams of a “soft landing” for the economy, despite the weak numbers.
Real GDP growth, you ask? Well, it’s not all doom and gloom. The year-over-year growth rate for real GDP in Q1 2023 was announced to be 1.6%, and the growth rate of real GDP from December 2021 to December 2022 was 0.9%. Admittedly, these aren’t the most impressive numbers, but hey, at least they’re not negative.
So, what will it take for these investors to stop hanging on every word from the Fed and start putting their money into new technologies and industries? Sadly, that’s the million-dollar question, and it seems the answer is shrouded in mystery, like a magician’s assistant behind a velvet curtain.
The stock market appears to be in a waiting game, holding its breath for the Federal Reserve to untangle its tightened monetary policy. Investors remain optimistic but seem to be putting all their hope in the Fed’s next move. It’s a shame that so much of the market’s future hinges on one agency.
Can’t we all just look beyond the Fed and invest in new technologies, industries, and ideas? We don’t have time to sit around waiting for the Federal Reserve to make up its mind like a teenager picking out a prom dress. It’s time to act, to invest in the future, and to bring a little stability to our lives. Because let’s face it, who wouldn’t want a little less “volatility” in their life?