Whatever Janet Yellen is doing, Wall Street approves
Two months in, we're right back where we started.
Save a heart attack or two.
Since the start of the year, despite some harsh dips, the Dow Jones, S&P 500 and the Nasdaq all are at almost exactly the same place they were Jan. 1.
The Dow still has some work to do, down about 2 percent overall since Dec. 30, but it’s a far cry from Feb. 3, when it bottomed out at 15,372.8, down more than 7 percent from one month prior. The Nasdaq has been at record levels for the last week after dropping almost 6 percent in January. CNNMoney.com had a great graph, split up into two parts, that shows the tumultuous ride investors have been on since 2014 started on the S&P.
In the first half, it looks awful. Down, down, down, up, down, down, then way down. At that start of the second graph is Jan. 31, a Friday, down about 6 percent from the start of the year. Now? It’s back to breaking record highs.
No one was really panicking — not really, at least — but you could hear the whispers getting louder of a second recession, a market correction, all those buzz words that make you click on links but offer only speculation instead of fact.
All of those bottom points and the subsequent rise have one thing in common — Feb. 3, which just so happens to be the day Janet Yellen officially took over as chairwoman of the Federal Reserve. She finished her confirmation hearings in November and was easily confirmed Jan. 6, so no one will forgive you if you think, “Geez, I thought she had been in there for months already.”
She wasn’t. And maybe that’s why stocks performed so poorly in January. If you thought Yellen had been around since Halloween, you can bet your investment broker and every other one in the country knew exactly when she’d be taking over so they could get some true direction in what kind of policies — *cough*taper*cough* — she’d be enacting.
Whatever she’s done in her first month, it looks like Wall Street approves. That includes this week’s talks in front a Senate panel, where she said the weak economy to start the year may have been due to the weather.
Normally I think those kinds of statements hold about as much water as an open hand. But for some reason, when Yellen says it, I almost believe it.
It doesn’t matter if I believe her or not. Apparently Wall Street does.
And after a lot of talk about the tumultuous state of stocks for the last two months, we’re at just about the same place we were when we started the year. Let that be reason No. 7,645,276 why you don’t watch your investment portfolio every day.