In the event you hear news on today’s market activity, try to remain calm.
In summary, US markets were down today (S&P 500 -2.45%, Down Jones -2.13%, NASDAQ -2.54%). Eunoia was down roughly 1% and emerging markets down slightly less (0.80%, although many emerging markets were already closed before the US opened).
Today’s move is largely due to the economic brain-trust at the Federal Reserve. In one day, they managed to reduce the chance of a September rate hike and then almost immediately increase that same chance. Once they realized the mixed messages they were “inadvertently” sending, they quickly tried to smooth over the conflicting messages, only to confuse markets further. With today’s market activity, investors effectively replied to the mixed signals the Federal Reserve was sending by sending their own message. That replay – that they’re idiots!
Regardless of the reason, Eunoia Financial has been prepared for a downturn in the market. While Federal Reserve incompetence is not the scenario I envisioned for such a loss, accounts managed by the firm have performed as desired in a negative environment. In aggregate, Eunoia clients gained 0.22% today.
The next question is, where to from here? While I expect there to be debate, explanation and backtracking over the weekend, next week (and the rest of the year) could go either way. The direction will largely be determined by how much investors still believe in the market, still believe in the Federal Reserve’s ability to manage the economy and to what degree investors are willing to risk their hard-earned savings to a bunch of bumbling clowns! Irregardless of the future direction, Eunoia portfolio’s are positioned defensively and should ride out most turbulence without too much drama.
Should any new developments arise, I will be sure to keep you informed.
If you have any questions, please don’t hesitate to call or email.