The S&P 500 lost 1.5% this week. Not great, but had it not been for the previous week’s strong gains, Friday’s close would have been a record high.
Everyone knows stocks cannot go up every…single…day (or week). Markets move in waves and every two steps forward are followed by one step back.
This week’s step-back was triggered by Biden’s extremely generous Covid relief package. The size caught some investors off guard and rather than cheer the extra free money, some people started fretting over the inevitable tax increases. Giveth with one hand, taketh with the other.
But should we really be worried about a 1.5% giveback? Say what you want about this market, but weak and vulnerable markets don’t keep setting new record highs. This bull market will die like all of the others that came before it, but this is not that time. Keep giving this rally the benefit of doubt until it gives a clear and compelling reason not to. Until then, enjoy the ride.
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