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Market Review May 8 2023
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April 2024

Market Review - May 8 2023

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In this week's market review, we're taking a closer look at how the S&P 500 has been crushing it, even in the face of increasing rates. We're also exploring some potential routes back to new all-time-highs. Finally, we'll delve into the U.S. Regional Bank stocks. Let's just say, it's not a pretty sight.

Don't miss out on all the action! You can read last week's review here.

This time is different.

The U.S Federal Reserve has executed the fastest rate increase since the 1980s. The Federal Funds rate just surpassed 5% for the time in 16 years. Nevertheless, despite these circumstances, the market has shown remarkable resilience, with a mere 15% dip from its peak in January 2022. Below, we've charted the S&P 500 drawdown and the interest rate since 1980. The dashed lines indicate periods of high interest rate increases. As we can see from the chart, the current market performance is an anomaly. In the previous instances where rates have increased to similar levels, the market has declined precipitously.

Interest rates vs S&P 500 drawdown

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