Market's Mood Swings
Over the past year, we've seen a shift in how the market reacts to economic news. Earlier, negative economic data like lower consumer spending or rising unemployment was seen as positive for stocks because it signaled that inflation might be cooling, leading the Federal Reserve to potentially cut interest rates. This was good for the stock market.
Now, however, the focus has changed. Investors are concerned that the economy might be weakening too much, raising fears of a recession, which would be detrimental to stocks. While no one can predict the future, our quantitative models utilize economic data points to help manage risk exposures.
Market’s Mood Swings
Source: Bloomberg, Redwood. Data as of 8/20/2024. Date range from 7/12/2021 - 8/20/2024.
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Allgood Financial
Disclosure: This piece is for informational purposes only and contains opinions of Redwood that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no representation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. The objectives mentioned are not guaranteed to be achieved. Investors cannot invest directly in any of the indices mentioned above.
