Last week was a huge week for the stock market. Last week was the transition week that moved the markets from the third to the fourth quarter; also marking the first trading day of October. Historically, this transition is a bit rocky; which is exactly what we saw last week. Wednesday was the first day of October and prompted a widespread sell off that hit all 3 major indices in the United States. While Thursday didn’t move the markets much either way, on Friday, we saw a great recovery. Today, we’ll talk about what we saw Wednesday, Thursday, and Friday; and explain why it is that we saw what we saw.
Wednesday
As mentioned above, Wednesday was a big day for the stock market. Marking the first day of October and the fourth quarter, Wednesday lead to a wide-spread stock sell off. With concern over geopolitical issues as well as investors becoming increasingly skittish about the Federal Reserve increasing interest rates sooner than possible, the transition into October seemed a bit worse than normal this year. Here’s what we saw…
- NASDAQ – Starting the day off at 4,486.65 Wednesdays brought hard times to NASDAQ. After a steep drop in value from 9:30am to 10:00am, the downward momentum seemed to slow. Nonetheless, we continued to see slow and steady movement as the NASDAQ closed the day at 4,422.29.
- Dow Jones Industrial Average – The Dow Jones Industrial average took the worst hit on Wednesday, falling from 17,040.46 to 16,807.15 by the end of the day. Much like the NASDAQ, the Dow Jones Industrial Average took a major hit from 9:30am to 10:00am and held a slow and steady downward trend throughout the day.
- S&P 500 – The S&P 500 shared a similar fate with the other two major indices. Starting at 1,971.44, by 10:00am the S&P 500 had fallen to 1,959.97. Continuing the rest of the day on a slow and steady downward path, the index ended the day at 1,946.70.
While Thursday didn’t bring as much of a sell off as Wednesday did, it proved to be a bad day for the second day in a row. With economic data coming out Friday, investors seemed to slowly unload anything that was concerning them. Here’s how the day went.
- NASDAQ – Starting the day at 4,421.25, things were looking up for NASDAQ in the beginning. By 10:00am it had climbed to 4,427.51 and seemed like it was starting to make a recovery. However, the rest of the morning didn’t go so well. By noon, NASDAQ had fallen to 4,381.53. Then, in the afternoon, things turned around yet again. The NASDAQ started to recover; ending the day at 4,429.74.
- Dow Jones Industrial Average – Starting the day at 16,808.27, the Dow Jones Industrial Average immediately diverted to a downward trend. 16,716.15. However, like the NASDAQ, the Dow Jones Industrial Average made an impressive afternoon recovery; closing the day at 16,800.82.
- S&P 500 – The S&P 500 followed the same trend as the NASDAQ. Starting the day at 1,945.83, the S&P 500 had risen to 1,946.77 by 10:00am. Unfortunately, the late morning brought bad news and by noon, the S&P was at 1.931.38. However, like the other two major indices, we saw a slight recovery in the afternoon with the S&P 500 ending the day at 1,946 even.
On Friday, we received economic data showing that we’ve seen job growth in the United States. On the other hand, we’re not seeing a major increase in salaries. The new data was a perfect mix of good and bad news. While the economy was getting better, poor salary growth should stop the Federal Reserve from increasing interest rates. As a result, investors started to show that they were happy. Here’s what we saw.
- NASDAQ – From the beginning of the day, the NASDAQ was on a completely upward trend. By the end of the day, the index had grown to 4,475.29 from 4,429.74 the day before.
- Dow Jones Industrial Average – With possibly the most impressive recovery, the Dow Jones Industrial Average ended the day 17,008.20 (up more than 200 points) after a day of what seemed like all upward trends.
- S&P 500 – Finally, following the same trend as the NASDAQ and Dow Jones, the S&P 500 started the day at 1,948.12. By 10:00am the index had risen to 1,962.28. Continuing on a slow and steady upward trend throughout the day the S&P closed at 1,967.60,
With the perfect mix of employment data, we’ve started to see investors’ concerns die down. As a result, we’ve started to see improvements in the market. The big question in the beginning of the transition was “Is the bull market gone?” What we saw late Thursday and early Friday gave us the answer…”The Bull hasn’t left just yet!”