Yesterday as bond rates continued to move higher, the SPX dropped 2% closing at the lows of the day. Overnight, futures moved up 1% before giving some of that back. So for at least the short term, the trend continues to be down. During the next three days, there may be a decision on the debt ceiling and infrastructure bill. Either one or both of those events can take the market up or down. Bond rates are a bit lower this morning and there is a limit for how high they will go based on the Fed fund rates. Since there is really very little chance that we will see the Fed raising interest rates, bond rates will remain relatively low. As for where the market may be headed, there are many predicting that the SXP will fall another 5%. That may be true but it is hard for me to believe that with the Fed printing press still printing and all of the money on the sidelines ready to work, that we go much lower than 5%, but don’t count it out.
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