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…

Overarching Market Concern Global markets have recently come under pressure over the reemergence of political and debt concerns in both Italy and Spain. The chief concern for both is the fiscal budget pressure the countries have been under while other EU members assist in providing liquidity. These budget pressures have been viewed as overly burdensome by the voting public, and some anti-EU candidates have been elected to office, ultimately threatening their participation in the euro currency. A move by either…

Stock market volatility is back. Last year, it seemed like no headline could shake the extraordinary calm of the market, and the largest peak-to-trough move in the S&P 500 was just 2.8%. As we saw yesterday, this year even minor news can move the market over 3% in just a few hours. What changed? Let’s start in January. From 12/31/17 to 1/26/18, the S&P 500 Total Return Index rose 7.6%. Then from 1/27/18 to 2/8/18, the S&P 500 Total Return…

As stated in our recent Q4 2017 quarterly newsletter and client education presentation, the calm, steadily rising equity market that had been in place since February 2016 was not normal. We did not know when a pullback would come, but we viewed its coming as inevitable. Today’s declines in the Dow and S&P 500 were dramatic, but they were certainly not unprecedented in the context of financial markets history. In fact, since 1937, the S&P 500 Total Return Index has…

The fourth quarter of 2017 capped a very strong year for US equity returns. Incredibly, the largest peak-to-trough move in the S&P 500 was just 2.8%, making 2017 one of the least volatile years ever. Since 1937, the S&P 500 Total Return Index has averaged more than one 5.0%+ pullback per year off unique 52-week highs, so the lack of any significant market decline since February 2016 is not normal. While we remain cautiously optimistic, we want to remind our…