Beware October 10th. Historically, 10/10 has been to stocks what The Bogeyman is to children’s nighttime affairs. Downright spooky.
10/10 has been the nexus of many historical highs and lows. In 2002, it served as the nadir of the dot-com bust. In 2007, it proved the apex of the bull market. And the start of a year-long descent into the steepest bear market of our lifetime.
This year, 10/10 yet again refused to recede into the calendar year without making its presence known.
Accordingly, yesterday saw the S&P 500 fall for the sixth straight day. Plummeting 3.29 percent. While the Nasdaq completely gave up the ghost, losing 4.08 percent. U.S. equities fell the most in a single day since February. When markets experienced a 10.02 percent pullback. Today, more of the same. With the S&P 500 and the DJIA falling 2.06 2.13 percent respectively.
Mercifully, the stock market continues to ignore the Goat Rodeo transpiring in Washington D.C. A testament to the power of markets. And to the strength of the current fundamentals. Granting investors opportunity to focus on that which remains most important — health, wealth, family and friends — despite the fuliginous pettifoggery in which both sides of our political duopoly are engaged.
The S&P 500 lost -0.51 percent last week. While the DJIA dropped 1.07 percent. And small caps gave up -0.86 percent. Only the Nasdaq managed to move higher. Adding 0.76 percent to its impressive YTD tally. Continue reading
Last week saw stocks finish higher. Though small caps lost ground. The Dow Jones Industrial Average finished its strongest two-week stretch since February. A sign that the inflation and trade-related anxieties that caused the index to stumble have abated.
Nor do we believe things will change in the near term. Empirical evidence reveals too many economic tailwinds occurring to douse the lights on this party.
Two weeks ago, I joined three friends in completing the Rim-to-Rim Grand Canyon hike. A 25-mile affair exposing us to some of the most beautiful scenery in the country. We camped and hiked. And ended the trip by spending one celebratory evening in Las Vegas. Continue reading
Welcome to September. A month in which seasonality works against us. Ranking historically as the worst month of the year for equity performance. In fact, September stands as the only month that, since 1928, has seen more negative than positive returns. Further distinguishing itself by posting the largest average monthly loss over that time frame.
September is to stocks what playoff games are to the Bengals. Historically losing affairs.
If last week offered any evidence, this year shall be no different. Every session last week finished lower. Pushing the Nasdaq 100 down 2.5 percent. The S&P 500 down one percent. And the Russell 2000 down 1.6 percent. Notably, it was the worst start to September for the Nasdaq since 2008. Which was the worst September in my memory.
Domestic markets finished mostly higher last week. While foreign stocks drifted lower. And the Nasdaq posted a slight decline.
Pushing aside trade-war reports, Q2 earnings were the story. With 91 percent of S&P 500 companies having reported, 79 percent have beaten earnings estimates. While 72 percent posted positive sales surprises. Bringing the earnings-growth rate for the index to 24.6 percent. Which — should it stand — will mark the second highest earnings growth rate since Q3 2010, which hit 34.1 percent.
Remember, late summer often ushers in the doldrums for equity markets. With the third week of July often marking a seasonal high. As trading volume declines while Wall Street’s denizens pass time in the Hamptons. Or St. Bart’s. Or wherever they go. With that pattern repeating throughout global financial centers. From London to Tokyo. The only differences being the vacation destinations and size of the bathing suits. Continue reading
The S&P 500 hit a weekly peak on Wednesday’s close. Then drifted lower. Closing up 0.6 percent on the week. And reaching its highest point since January. Up 4.56 percent YTD. And back within 2 percent of January’s record high.
It was a tough week for many big tech and media stocks. As valuation always matters at some point. But the rest of the market, which remains a lot cheaper than the FAANG stocks, has held steady thus far.
It’s been six months since the last S&P 500 high. Marking the third-longest stretch below a new high since 2009. Yet, the all-time high sits only 1.5 percent above the index. So close you can smell it. But bears do not plan to just give anything away. And have been very effective these last six month at holding the line. And thwarting the bulls.
Stocks rose ever so slightly last week. As the Dow Jones Industrial Average returned held the 25,000 threshold in its attempt to reclaim the January highs. Not to be outdone, the S&P 500 climbed back above 2,800. Where it currently sits 2.60 percent below January’s record high. Having risen 4.3 percent on the year.
The potential U.S.-China trade war continued to heat up. As both sides pressed ahead with tariffs on $34 billion in imported goods. And each threatened of more to come. President Trump warned that he could unleash tariffs on $500 billion worth of Chinese goods if trade terms are not eased.
Yet, stocks continued to see the forest for the trees. As shares climbed on a Goldilocks jobs report. Not too hot. But not too cold. Payrolls came in at 213k vs. an expectation of 195k. Besting the three-month average of 211k. Unemployment rose from 3.8 to 4 percent. As more American workers re-entered the labor force. Wage gains slowed.
Equity markets took it on the chin last week. Reeling like punch-drunk fighters clinging to ring ropes just to stay upright. The only market cap to eke out a gain was the S&P 600 Small-cap Index, which rose a meager 0.2 percent. The S&P 500 lost 0.88 percent. While the DJIA fell 1.82 percent. And has gone negative (-0.5 percent) on the year.
Market breath remains positive and continues to support higher prices. Sector breath also remains positive, with 71 percent of industries above their 50- and 200-day moving averages. Yet, global markets appear in retreat. With Europe down -4 percent. Brazil down -19 percent year to date. China down -10.75 percent. And India lower by -5.4 percent.
The year’s surprising top domestic industry group? Retail. Up +29 percent. While the worst performing groups have been tobacco, conglomerates, household products and food staples.