Two Steps Back 📉
Two Steps Back
The month of October is known for being highly volatile when compared to the standard deviation in indexes prices in other months of the year. Even if investors fail to include some of the worst stock market crashes (in October 1929 and October 1987), the month of October has still historically been the most volatile month of the year.
On Wednesday, the S&P 500 was down more than 2.5%, while the Dow Jones Industrial Average was down over 2.55%. The Nasdaq Composite also traded lower making all three indexes officially in the red as we close out the month.
Globally, COVID-19 restrictions on business continue to be implemented. In the U.S., daily reported cases rose back above 70,000 after hitting a new record last week with 80,000 cases. Germany and France also placed new restrictions.
Remember, this week is also the busiest week of the earnings reporting season. The volatility is coming in various forms and overall, this has taken a toll on stock gains on Monday, Tuesday and Wednesday.
As the U.S. stock market has been fundamentally disconnected to the state of the economy since the beginning of the pandemic, it will be interesting for invstrs to see where the market goes in the upcoming months. What do you think?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.