Today the CBOE Volatility Index (VIX), which tracks the implied volatility of options on the S&P 500 Index, closed at 82.69. This is a new all-time closing high eclipsing the prior mark set 11/20/2008 during the height of the financial crisis. Needless to say, fear, uncertainty and panic are driving the market right now. As far as what has driven the panic, nothing really has changed since our last blog post one week ago – it is clearly still COVID-19…
In addition to more negative coronavirus headlines (ex-China which continues to improve), the big financial news over the weekend was the enormous decline in crude oil prices throughout the globe, with prices tumbling over 20% in one day. Oil prices are now close to $30/barrel vs. over $60/barrel for much of 2019. The reason was the inability of OPEC/Saudi Arabia and Russia to strike a deal to limit output, and instead their decision to actually raise output. The oil market,…
The financial markets have had a wild week that can only be described as panicked, with significant 3%+ swings up and down on a daily basis. We continue to believe that sticking to your long-term plan is the best course of action in good times and in bad. On January 24, near the market peak when the outlook seemed much rosier, we wrote about how we were trimming equities in most client accounts to keep portfolios at their beta targets.…
With fears of coronavirus spreading around the globe and its major impact on global economic activity, the S&P 500 this week has suffered one of its worst weeks in history, underscoring just how fast sentiment can change from optimism to extreme pessimism in the stock market. Our view on the virus has not changed since our post on Monday – we do not feel it is a wise decision for long-term investors to take a position on the severity of…
Global stocks are suffering a steep decline this morning. At the time of this writing, the S&P 500 is down roughly 3%. The drivers of today’s sell-off are fairly clear: coronavirus and Bernie Sanders. Here we discuss our understanding of both of these events and what it means for your portfolio management at GGS. Coronavirus: The spread of high rates of coronavirus infection to Iran, Italy and South Korea over the weekend have increased fears that the virus could become…
After a spectacular 2019 (S&P 500 Total Return Index +31%), the US market has continued its run to start the new year, up 3% through yesterday’s close. The S&P 500 TR Index has now gone 70 consecutive trading days without a 1.0%+ move in either direction, rising 12.5% over that span. This positive trend coupled with a rare lack of volatility has been driven by two primary catalysts: The US/China phase one trade deal has eased anxieties over further trade…
Since the S&P 500 Index peaked on July 26 at $3025, it has fallen 6% to today’s closing price of $2840, highlighted by extreme down moves on August 5 (-3.0%) and today (-2.9%). Note that the S&P 500 is still doing well year-to-date up almost 15%. Market sentiment the past few years has shifted multiple times from one extreme to the other. Either everything is great and concerns are minimal or brushed aside (see January 2018, September 2018 and July…
It has been exactly one month since our last market commentary, and the market selloff has continued. In November, we described three overhangs that weighed on the market: global trade, Italian debt, and interest rates. Since that time, Italian debt has become less of a concern as the Italian government struck a budget deal with the EU. On the other hand, the remaining concerns over global trade and interest rates have intensified. Yesterday, the Federal Open Market Committee (FOMC) raised…
Since our last commentary on October 11, 2018, the S&P 500 has both held a minor rally from $2728 to $2814 and subsequently fallen even further to today’s close of $2642. From a macroeconomic standpoint, the three primary overhangs – global trade concerns, Italian debt issues and rising interest rates – remain roughly the same as they were on October 11. Fundamentally, the main incremental negative has been weaker than expected corporate earnings. Third quarter reports were actually strong on…
Since the S&P 500 Index peaked on September 21 at $2940, it has fallen 7.2% to today’s closing price of $2728. The first few days of this decline were very gradual, followed by sharp moves lower both yesterday (-3.3%) and today (-2.1%). Yesterday’s move was the biggest one-day drop since February, when the market actually had two days in the same week that were worse at 3.8% and 4.1%. In fact, the recent decline has felt very similar to February…
