The FCMS Investment Committee is pleased to share the latest insights on the current financial market and economic developments.

Market Perspectives

Here are the top things from our FCMS Investment Committee on current financial markets and economic developments:

1. 1. Equity Markets Show Bullish Price Action, S&P 500 Gains Almost 11% Since Late October Lows

      In a rather listless holiday-shortened trading week, equity markets meandered higher, bringing the gains in the S&P 500 to almost 11% since the late October lows. The Index closed Friday less than 5% from its all-time high. While this has been a quick, sharp rally, the bullish price action could extend into the end of the year. Year-to-date laggards have only recently begun benefitting from short-covering flows. Given the performance spreads between the outperformers and underperformers this year, further rebalancing could be in store for the next few weeks.

   2. Nvidia’s Strong Earnings Report Doesn’t Stop Stock from Selling Off

      The highlight of last week from a market perspective was the earnings report from Nvidia after Tuesday’s close. Despite exceedingly strong results and raising their guidance for the next quarter, the stock sold off on Wednesday and Friday. This doesn’t signal an end to the AI trade in our view (far from it), but it does highlight the above point that trends may pause for a while. The stock closed Friday up almost 230% this year. Additionally, the market reaction to Nvidia earnings may mark a transition in the AI trade away from the “picks and shovels” hardware companies and towards the software services and model providers of the technology.

What Happened Last Week?

Here is a recap of the top things that happened last week:

• A short trading week saw the S&P 500 inch toward an all-time high.
• Short covering has likely started to narrow the dispersion between year-to-date winners and losers.
• Investors sold Nvidia stock despite stronger-than expected earnings and revenues. AI trade may be in transition.

What We’re Watching This Week

Here is a recap of what we’re watching for this week:

• Economic updates include inflation readings in the US and Europe and revisions to US 3Q GDP.
• Commodity markets are closely watching Thursday’s OPEC meeting.
• Ahead of the Fed’s media blackout starting this weekend, Powell and other FOMC heavyweights will speak throughout the week.

To receive weekly updates from the FCMS Investment Committee, please subscribe to our blog and follow us on our social media channels for the latest information.

To learn more about FCMS Investment Management, please click here.

Securities and Investment Advisory Services offered through Founders Financial Securities, LLC (FFS). Member FINRA, SIPC and Registered Investment Advisor. The commentary in this report is not a complete analysis of every material fact in respect to any company, industry, or security. This material contains the opinions of the author(s) but not necessarily those of FFS, and such opinions are subject to change without notice. This material has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and do not constitute a solicitation to buy or sell any security or product and may not be relied upon in connection with the purchase or sale of any security or device. Index information is intended to be indicative of broad market conditions. The performance of an unmanaged index is not indicative of the performance of any particular investment. Individuals cannot invest directly in any index. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed. Investors should consult their financial, tax, and legal advisors before making investment decisions. Past performance does not guarantee future results. Materials above are produced by Horizon Investments, LLC, which is not affiliated with FFS. © 2022 Horizon Investments, LLC.