See, there is life after being a headless chook for a couple of days.
Wall Street almost eliminated the big losses from Monday by the afternoon trading session on Friday, but eased and left a few small blobs of red ink on the table.
The S&P 500 rose 0.47% to finish at 5,344.16 at Friday’s close, the Nasdaq was up half a percent at 16,745.30, and the Dow added 51 points to end at 39,497.54.
For the week, the S&P 500 was just 0.04% lower. During Friday’s session, it had managed to briefly turn positive for the week before losing some of its gains.
Meanwhile, the Dow and tech-heavy Nasdaq were down on the week by 0.6% and 0.18%, respectively – almost margin of error falls after Monday’s plunge out of bed drops.
You wouldn’t be surprised to know that last week was the most volatile week of 2024 for the market.
The Dow on Monday tumbled 1,000 points, while the S&P 500 lost 3% for its worst day since 2022.
Disappointing US jobs data from the prior week and concerns the Federal Reserve was too late with rate cuts were the main culprits for the selling, along with the unwinding of a popular currency trade by hedge funds – the yen carry trade – after the Bank of Japan lifted interest rates.
In fact, the fears about the US economy were irrational and trumped up – it was the panic spread by hedge funds and others as their yen carry trade deals blew up that triggered the panic attacks.
This week sees US inflation and retail sales providing a test for markets and investors (a rate cut is a certainty for September, according to market forecasts and polls).
Adding to the pressures, the melting away of the widely held belief that Donald Trump was a shoe-in to win the November election. Kamala Harris has made it an even money bet, with some polls showing her ticket with a small edge.
That has forced a lot of hedge funders and other mega-rich investors to reassess their strong support for Trump.
The astute investor will have noted that Warren Buffett picked the peak in Apple shares to sell and take profits…hmmm.
So Wall Street is back on par with a week ago – but that disguised the big rebound in the megacaps, led by Apple which survived the news that Warren Buffett has sold half Berkshire Hathaway’s stake in taking a lot of money and going into US T notes.
In fact, after predicting the end of the megacap trade in the wake of Monday’s one-day downer, the seven all fought back with big gains – and in the case of Meta and Nvidia, enormous gains for a four-day period.