Red week
Guys its strange but thats how markets are sometimes. The US Economy is reporting robust numbers - unemployment low, vacant positions up etc. - but the stock market is down. The S&P lost -1.3% this week and saw a red start into the year.
Why?
Reason of the stock markets latest weakness is the following: The better the Economy is running, the smaller the odds for further rate cuts in 2025. Why should the Fed lower interest rates if the Economy is good and if inflation remains moderate? But if bond yields are high, thats competition to stocks and it means no cheap money for investing in growth.
Keep calm
I wouldn‘t worry too much though. Its still early in the year and who knows what will happen in two weeks when the Trump Administration will start? Who knows how Economy will react on things they implement then? A correction on this high level is just healthy after the rally we saw last year.
