Week Ending January 29 Financial Markets Update

The Tactical Allocation Portfolio (TAP) remained true to its current allocation over the course of a historically wild week in domestic equity markets. More on that below…

The S&P 500 Index declined 3.29% last week as volatility in equities jumped to the highest level since late October, marking the index’s worst performance in three months. Headlines were grabbed by the trading frenzy over heavily shorted stocks such as GameStop Corp and AMC Entertainment Holdings Inc., which returned 400% and 278% last week respectively. Speculation that hedge funds were degrossing, cutting risky bets and decreasing their long equity positions to cover their short positions, caused downward pressure on equity markets. The SEC said they would be looking into behavior by any regulated entity that demonstrates abusive activity in an effort to protect retail investors.
A good summaton can be found by clicking the link below:

Treasury yields were little changed last week despite several economic developments. The U.S. economy continued its rebound in the second half of last year, with real GDP growing at a 4% annualized rate in the fourth quarter after growing at a 33.4% rate in the third quarter. Despite rebounding in the second half, the U.S. economy contracted 3.5% in 2020, which is the largest annual decline on record dating back to 1948. The Fed left rates unchanged last week, as expected, keeping monetary policy loose in an effort to boost the economy. Fed Chairman Jerome Powell cited a moderating recovery in recent months and said, “The pandemic still provides considerable downside risks to the economy.”

The interpretations and organizations of these ideas are the confidential thoughts of 1st & Main Investment Advisors and do not represent the opinions of BFCFSDifferent types of investments involve varying degrees of risk including market fluctuation and possible loss of principal value. There can be no assurance that any specific investment strategy will be profitable. *some content provided by First Trust Portfolios L.P.  Member SIPC and FINR


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