That may be my goofiest title ever. Actually, it’s an anagram of “anagram fun,” which is the theme of this week’s article. Take, for example: “A Ms. Prim Financed a Theft.” That’s an anagram of “Tariffs and Impeachment,” the two topics that have been the top items in the news lately. So far, the market hasn’t seemed too concerned about the impeachment circus,
I welcome the month of November with open arms. Sure, the days are going to continue to get shorter and the temps are going to continue to get colder, but at least we won’t have to hear any more Octoberfest-based ad schemes. All last month, car dealers had Octoberfest sales; radio stations had Rock-toberfests; Japanese restaurants had Wok-toberfests. One craft brewer had a Bock-toberfest.
Both the S&P 500 Index (SPX) and the NASDAQ Composite Index (COMP) came through the week with small net gains despite a lengthening list of bad news headlines from around the world. In addition to growing geopolitical tensions, those headlines have recently included more signs of slowing worldwide economic growth. Data out last week showed that economic growth in China slowed to its lowest rate in nearly thirty years.
Following a September with more than its share of dull, narrow-range trading sessions, the first two weeks of October have been far more action-packed. Seven of the nine trading days so far this month have had a big gap opening or a very wide daily range, or both. In most of those cases, the market action came in response to trade war headlines;
As a rule, I avoid imparting any political spin in these commentaries. Still, I think everyone would agree that it hasn’t been all sunshine and warm breezes for the Trump administration during its reign. Now, a new and darker storm threat has appeared. The sudden possibility that impeachment hearings might begin, has materialized as a new potential peril on the market’s horizon.
I’ve never been in a pawn shop, but I think I understand how they work. If I needed to pick up a little cash, I could take something of value I own to the pawn shop. The shop would buy the item from me with the mutual understanding that I could buy it back at some point in the future. I get my short-term cash along with the option to repurchase the thing I pawned in the near future.
After soaring in the previous week, stocks flew higher again last week. The major averages all gained between 1 ½% and 2% for the week and they all ended the week at their highest levels since climbing to record highs in July. The Buzz Lightyear moment came on Thursday morning when news that trade talks with China were scheduled to resume next month made the market believe it could fly.
Vacations are a great time for observation, reflection and contemplation. I’d like to share with you several observations that occurred to me during a recent week at the beach. First, the beach is a great place for people watching. I know art fairs and airports are good people watching venues but spend just a couple hours at the beach and you’ll see what I mean.
In a week dominated with trade war and central bank news, and following on the heels of their worst week of the year, the major averages ended last week with relatively minor losses. Both the S&P 500 Index (SPX) and the NASDAQ Composite Index (COMP) lost about 0.5% and the Dow Jones Industrial Average (DJIA) was lower by about 0.75%. What those numbers don’t reveal is the amount of ground the indices covered during the five trading sessions.
Volatility is upon us once again. When the short-term investment charts start to look like roller coasters and sketches of mountain ranges, it is important to recall the work you have already done with your Financial Advisor. The mutual efforts and planning you have put in place through careful and thoughtful development of a sound investment strategy is always key,