Excerpt

Stock Market: Volatility Continues as Gradual Recovery is Predicted

If there is a way to protect your stock holdings from volatility, no one has discovered it yet. July’s stock market gyrations showed the dual effect of good earnings news coupled with disappointing economic data. In mid-July, the Federal Open Market Committee released the minutes from its June meeting, suggesting the recovery will continue at a slower pace than originally projected. The report showed that some committee members have downgraded their forecasts on economic growth, and that inflation and employment rates are expected to be lower than levels consistent with their mandate. On an optimistic note, they foresaw that appropriate monetary policies could bring both employment and inflation to levels consistent with the Fed’s objectives. Overall, the markets ended the month positively. Investors helped major indices push through their 200-day moving averages, an indicator that is viewed as a positive sign for future strength. The Dow Jones was well above its 200-day average by July 27 – encouraging news for analysts and investors alike.