By
Steve Muchoki
April 16th, 2024
While the outlook of the US market is impressive, fears of impending economic slowdown still abound and this will guide investors in choosing their investment strategies appropriately moving forward.
United States stock market maintained their relative growth trends on Friday as futures tied to the Dow Jones Industrial Average (INDEXDJX: .DJI) shot up by 0.05% or 20 points. The futures on the Nasdaq Composite (INDEXNASDAQ: .IXIC) and S&P 500 (INDEXSP: .INX) both also recorded a 0.13% jump.
The futures market took its growth impetus from the broader stock market as the S&P 500 closed Thursday’s session up 1.43% to 4,520.16. The Nasdaq Composite recorded 1.93% growth to 14,191.84 while the Dow Jones added 349.44 points atop a 1.02% growth to 34,707.94. Thus far this week, the Dow Jones has been the relative laggard as it is down by 0.1% week to date while the two other mainstream indexes have recorded their second straight weekly wins with at least a growth rate of 1.3% for the S&P 500 and 2.1% for the Nasdaq Composite.
The market’s momentum comes despite the growing list of sanctions being meted on Russia for its invasion of Ukraine. While the outflow of capital markets from the Russian economy has largely kept the worries of the nation’s economic collapse, the pulled funds from Russia seem to be making their way to the other advanced markets like that of the US.
The healthy nature of the US stock market is also somewhat hinged on the trust placed on the United States Federal Reserve officials who for the first time in three years hiked interest rate by 25 basis points last week.
“I think this is a market that has moved very far, very fast on this assumption that the Fed knows exactly what they’re doing and that they’re going to land the plan with perfection,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, said on “Closing Bell: Overtime.” “And I just don’t think that risk premiums are sufficient.”
Russia Stock Market Saw Uptick Following Month Long Closure
The Moscow Stock Exchange opened for trading on Thursday after close to a month of shutting down to cushion the effect of the sanctions on the country’s capital market. Following the partial reopening, the benchmark MOEX index (IMOEX.ME) gained as much as 10% in early trading, a growth that US officials have debunked saying it is merely being fueled by the Russian government.
While the outlook of the US market is impressive, fears of impending economic slowdown still abound and this will guide investors in choosing their investment strategies appropriately moving forward.
“With an economy in late cycle, fears of impending slowdown make defensive sectors relatively more attractive,” Commonwealth Financial Network global investment strategist Anu Gaggar said in a commentary. “Thus, for an equity investor, it is imperative to pick your spots carefully.”
“While a paring back of equities may not be necessary, a defensive relative positioning going into a possible slowdown may help investors ride the wave,” he added.
In the US, many outfits closed with gains with Tesla Inc (NASDAQ: TSLA), and JPMorgan Chase & Co (NYSE: JPM) amongst the earners with 1.48% and 0.65% respectively.