US indexes continued their ascent higher during the third week of September, with the S&P500 adding +0.9%. The Dow, which tends to be a bit more heavily influenced by industrial sectors and the traditional goods-based economy (rather than services), fared even better with its add of +2.3%; that narrows its relative performance disadvantage against more services and technology focused sectors which are generally leading the domestic charge higher YTD. Transportation and Industrials, two areas watched by Dow theorists for economic signal, have also outperforming the broader market recently giving encouragement and a more optimistic thesis on the prospects for the market to continue on its march higher. International markets, which have been the most notable black-eye for diversified investors and those believing foreign markets represent a less expensive opportunity set, are also enjoying relative outperformance so far in September.
Monthly Archives: September 2018
Is it Time to Breakup with Goldilocks? – Week Ended 9/14/18
The month of September started a bit challenged following very strong runs in July and August; that is until last week when the S&P500 managed to rebound and conclude the week higher by +1.2% and bring the index back to a little better than break-even for the month-to-date. With the latest week, the S&P is now up a handsome +10.2% in 2018. The figure is remarkable considering US equities moved -12% lower between late-January and early-February and spending the better part of 6 months fighting to fully recover against a volatile political and global trade backdrop. International markets generally cannot claim the same resilience however. Emerging markets are off -9.2% YTD (and in bear market territory from their highs earlier this year); developed Europe is also negative YTD. Even within the US, performance is extraordinarily bifurcated; growth (tech, healthcare) enjoys a more than 1000 basis point favoritism vs. value (think energy, utilities, consumer staples). This growth-over-value bias is a carryover from much of the last several years, but made even more extreme in 2018. It is tempting to wonder if value (or international for that matter) will ever enjoy a sustained period in the sun again.
“It Matters When” – September Commentary
How old is someone born in a leap year, on February 29th? I guess it matters how and when you start counting. The current Bull Market started March 9, 2009. By most any measure, this Bull Market is now the longest running at 3,463 days. It achieved its “longest status” on August 21. Amazing though, this Bull Market is often not considered one. Not many believe in it and some stubborn skeptics still refer to it as a strong rally. Perhaps that is because many investors were under or un-invested during much of these years because of the two Bear Market drawdowns of almost 50% in 2000 and 2008. Many were afraid to re-invest following severe portfolio value loss and market volatility. Trying to time the market by following emotion is most always a very dangerous strategy and often results in a bad investment experience.