The end of September marks the first monthly drop for the S&P 500 since January. The delta variant, a surge in bond yields, bond tapering talks and supply chain issues have been pressuring stocks. We could be nearing the bottom as momentum has leveled out while the put/call ratio is at a spot that usually marks a reversal.
There are several indicators pointing to higher prices, and I’ve picked out one ETF that could bounce in the short term — and more in this stock market recap.
Stock Market Recap
In Friday’s stock market recap, stocks are mixed as investors end a losing month and start the most volatile trading month of the year.
Historically, October is the most volatile month on Wall Street.
Momentum has been declining for large caps in the past several weeks. The put/call ratio is above 1, which usually signals a reversal in the market. When we look at indicators, it seems like we’ve bottomed out and could see higher prices in the short term. Most of the market-moving information seems to be priced in already.
The U.S. Department of Commerce expects economic growth to slow to 5.5% in the third quarter compared to the second quarter’s 6.7% growth, adjusted this week. The Department of Labor reported higher jobless claims for the third week in a row. The four-week moving average, however, is 340,000, which is great compared to the levels around 800,000 we saw at the peak of the pandemic. So the rise in jobless claims isn’t too big of a concern — yet.
Roger’s Radar: Biggest ETF Play
I talk about the bond market in most of my morning videos. The Federal Reserve is ready to start its bond tapering plan soon, and the bond market will take a dive. Yields spiked this week and we saw the bond market fall. While bonds will eventually trade lower when purchases slow down, I expect they could be choppy for most of October.
Today’s ETF tracks long-term bonds and dropped too much, too fast this week. It’s currently trading at $144.50 and could reach the $150 level before eventually dropping again.
In this video, you’ll discover how the market performed in September… what the put/call ratio is telling us… the biggest market movers this week… what I expect from the bond market in the short term… why I think we’ve bottomed out… and one ETF that could bounce soon.
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