weekly market update

It was a quiet week for economic data, but the path of least resistance remained higher, and the S&P 500 rose about 0.5% for the week.  The market action beneath the surface was noteworthy because market breadth, or the number of stocks participating in the rally expanded significantly, as investors rotated out of a small group of mega-cap tech names that have driven most of the year-to-date gains and rotated into market laggards such as energy, materials, industrials, and small cap stocks.  The S&P 500 has now risen four weeks in a row and despite the recent debt ceiling drama, market volatility as measured by the VIX, has fallen to its lowest levels since January 2020.  However, next week brings the consumer price index (CPI) for May on Tuesday and Federal Reserve policy announcements on Wednesday, so market volatility could return should either of those events surprise markets.

Ian G. Browning, CFA
Managing Director, Investment Strategies | Shareholder

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