Despite Thursday’s 250 point Dow drubbing, the key indices closed mixed on the week. The Dow Jones Industrial Average (chart) finished the week down 126.39 points, the Nasdaq (chart) finished up 19.62, the S&P 500 (chart) closed lower by 7.82 points and the Russell 2000 (chart) closed the week out gaining 3.84 points. Equities digested a lot of news this week including the Federal Reserve indicating they are ready to step in should the economy continue to falter. However, certain traders were disappointed the Fed did not provide another round of quantitative easing, hence a significant sell-off ensued on Thursday.
Personally, I think the markets need to quit relying so much on central bank stimulus and begin to focus on corporate earnings, which have been overall quite impressive. We are entering the last trading week of the second quarter which could prompt end of quarter window dressing. Window dressing is a strategy used by certain mutual funds and institutions near the end of the quarter to improve the appearance of their fund(s), this could bode well for the markets. Another potential positive for equities is Q2 earnings reporting season which begins in July. In my opinion, this is a key catalyst in whether or not stocks will stabilize over the summer and hopefully de-emphasize what the central banks may or may not do. Good luck to all.
Have a great weekend 🙂