This Week’s Market Action

From fears of crackdowns on exchange traded funds to the dollar reaching a whopping 20-year high, the stock market has been on a rollercoaster ride in recent weeks – and it’s only set to continue, despite Wall Street’s stabilization attempts.

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Here M&R Capital Management reports the top three maddening market moves in more detail.

Wall Street Attempts Stabilization

Monday May 2, saw stock futures fall as an adrenaline-fueled week of trading caused traders to struggle to regain their footing. Energy stocks fell massively, and big-name tech titans like Alphabet and Meta Platforms were down more than 2%.

Even though the week’s cumulative moves weren’t necessarily bizarre, many daily swings were jaw-dropping.

The Dow experienced its best day since the beginning of the pandemic during the middle of the week but quickly lost all momentum by Thursday. Why? It was likely correlated with Jerome Powell’s statement confirming the central bank wasn’t thinking about a 75-basis-point increase.

The Dollar Reaches a Two-Decade High

Moving on to perhaps the most notable move to look at the dollar’s 20-year record high. It reached this peak on Monday, May 9, as concerns around higher interest rates rose and Shanghai tightened its lockdown restrictions.

The sky-rocketing inflation has investors fearing even more tightening as policymakers attempt to deal with the central banks’ rate increases. Thanks to the sharp rise, many investors believe a global market slowdown is incoming.

However, some disagree.

The strategists at UBS Global Wealth Management recently said that they believe investors should find a position in the reality of present inflation instead of thinking about the chance of a recession.

The US Consumer Price Report

Wednesday is the release date of the United States consumer price report. And yes, investors are certainly tense in anticipation.

Currently, experts predict only a very minor inflation ease. However, that won’t do anything to prevent the Federal Reserve from raising by at least 50 basis points next month.

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Finding Safety in The Dollar

With many worries on their plate investors are finding solace in the dollar, which has reached a two-decade high, as reported earlier.

The dollar index stated it rose around 0.4% to 104.19. However, financial strategists believe it has the potential to run toward 107.

While the USD finds new heights, it’s battering other currencies. The Japanese yen experienced its weakest position since 2002, and the euro decreased below $1.05.

US Regulators Investigate ETF Prompting Restriction Fears

This week’s final story sees US regulators scrutinize the sale of ETFs to retail investors. This analysis has prompted worries in the industry that regulatory bodies are planning to clamp down on these trades.

The Financial Industry Regulatory Authority is looking into sales practices of “complex products” as a monsoon of small investors has begun trading rather complicated vehicles. The rise is so significant that it’s prompted an in-depth look at policies, warning investors that they may not understand the risks.

And so, the rollercoaster undoubtedly continues!

Disclosure: M&R Investment Management, Inc. (“M&R”) is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration with the SEC as an investment adviser should not be construed to imply that the SEC has approved or endorsed qualifications or the services M&R offers, or that or its personnel possess a particular level of skill, expertise or training.

M&R mainly provides investment advice to individual investors. All information provided herein is subject to change. Investment advice and financial planning services are provided by M&R. M&R is not affiliated with any of its custodians including:

Schwab Advisor Services or Pershing Advisor Services.

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