This week, investors were hit with a dose of reality. And that reality is that things aren’t going as well as they seemed to be going. Stocks spent much of the week down in the dumps, as a combination of factors began to weigh on equity prices.
To start, the data released this week has been mixed. While some metrics, such as unemployment, managed to be positive, others were less than ideal. This created confusion among traders looking for direction. Also adding to the confusion was the release of the FOMC minutes from the Fed, as well as several speeches by Fed governors. Again, they painted a mixed picture of the economy and didn’t provide a concrete timeline for the next interest rate hike.
The earnings picture didn’t help either. The next wave of quarterly earnings is upon us and, so far, the picture has been murky at best. The continued trend of ok profits and lower revenues/guidance figures has been a factor in previous quarters. With earnings season ramping up, that trend appears to be continuing. And that doesn’t bode well for equity prices going forward.
All in all, the general state of confusion, here at home and abroad, made for a down week for stocks.