Next week, Wall Street’s big boys return to their offices. Campaigning for mid-term elections moves to the front burner, and tariff threats between the U.S. and China will likely escalate. Welcome to one of the worst months of the year for stocks.
At the Market
As of Friday, we were in striking distance of a record high on the S&P 500 index. We have been here before, but something tells me that this time we just may break through. But for how long? Granted, stock market volumes are exceptionally light, which is understandable, since we are heading in to one of the slowest weeks of the year. That makes any new highs suspect until volume improves. We would need to wait another week or so for that to occur. Next weekend is Labor Day and it is only after the holiday that the Big Boys…
It is that time again. Stocks are entering the weakest time of the year on a seasonal basis. It is also a mid-term election year. Both factors could combine to keep the averages in place for a few months longer.
The S&P 500 index is within a hair’s breadth of breaking out. This week we topped 2,850, which we haven’t done since March. The record high for the index in January was 2,872. Can we top that?
This month would be a good time to go on vacation. Otherwise, you might be tempted to do something rash like chase stocks or sell at their lows. That is the kind of market volatility investors should expect in August.
As the second quarter earnings season go into full swing, investor’s focus is divided between what is happening on the trade front and the latest earnings result. Overall, good earnings are trumping Trump’s trade war for now.
It’s the same old song. It has been playing over and over since the end of January. Higher interest rates, a stronger dollar, and, of course, the inevitable and meaningless stream of tweets from our Tweeter-in-Chief are keeping stocks range-bound. How long will this condition persist?
While the stock markets meander through this sultry summer, bond investors are glued to the yield curve. What, you might ask, is the yield curve?
There was nothing to see in the markets this week, simply more of the same crisis news that may keep the media happy, but no one else. Tariffs and trade remain in the forefront and will continue to do so. What should investors do?
The world is in turmoil. The news is all bad. Trump is threatening to up the ante on tariffs. NAFTA is kaput. Our trade partners hate us. China won’t back down and, if you have time to spare, you are reading about immigrant kids locked in Texas dog cages by order of the president. So why is the stock market holding up?
Investors waited all week for President Trump’s verdict. On Friday, he did not disappoint his followers. He decided to move ahead with plans to slap $34 billion in tariffs on Chinese imports. Stock markets worldwide fell on the news as investors await a Chinese response.
The markets are approaching this year’s half-way mark and investors have little to show for it. The averages are fluctuating between flat and up 1-2%. This sideways action is bullish, given the wall of worries that investors face.
As the month wound down, so did stocks. Pronouncements from Washington dominated the market’s direction on a daily basis. We can expect to see that trend continue as the summer doldrums reduce liquidity and exaggerate market swings.
Most indexes ended the week where they started. While day traders may have lost or gained from intraday moves, serious investors simply ignored the constant and contradictory stream of news coming out of Washington.
The S&P 500 Index had its best week in two months. All the averages made good gains and investor sentiment numbers are improving. We could see a return to the January highs before summer, unless something comes out of left field.
You would think an unemployment rate that hit 3.9% in April would have cheered the market. It was, after all, the lowest such rate in 18 years. But no, all eyes were focused on the first round of China/U.S. trade talks, which conclude today.