Archive for the ‘Market Update’ Category

The Strongest

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The next two weeks historically provide the best equity returns in the fourth quarter. 

The Monthly Streak

The S&P 500 Index is on its way to another impressive record.  With November winding down the index is headed for its thirteenth straight monthly advance which would break the longest streak in history: 

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Steady. Higher. Relentless.

Hat tip Charlie Bilello

So Earnings Have Been Pretty Good

To say the least.  Just how good? 

Third quarter earnings season is pretty much over and it will be the 23rd consecutive quarter that the final number exceeded the estimate. The highest revisions came from the important tech and financial sectors.

Hat tip Ryan Detrick

 

It’s Over

Stat of the day(courtesy of Ryan Detrick):

So yesterday the S&P 500 closed more than 1% away from its all-time high. This came after 54 consecutive days closing within 1% of the all-time high. Where does that incredible streak rank? Second, behind only 84 days in ’64.

Steady. Higher. Relentless.

Hat tip LPL Research

The Most New Highs

The lede:  Since the inception of the Dow Jones Industrials in 1896, no President saw more new highs the year after the election than President Trump. Interestingly, no one had less 1% changes either:

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Hat tip Ryan Detrick

And It’s Still Not Enough

The lede:   The federal government hauled in record total tax revenues in the month of October, taking in a total of $235,341,000,000 in taxes during the first month of fiscal 2018, according to the Monthly Treasury Statement released today.  The federal government also brought in record individual income tax revenues for the month of October, taking in $127,832,000,000 in individual income taxes.

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Read the entire mind-numbing article here:  www.cnsnews.com

Who Needs a Correction?

Key bit:  It’s been more than a year since the S&P 500 declined as much as 5% from a prior high. That’s quite a long time, now the 5th longest period without a correction in history. With recency bias in hand, investors are starting to forget that corrections are a normal occurrence in markets.

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More:  So will there ever be another correction?

I think it’s a safe bet that there will be, unless the laws of risk and return have been repealed. We just don’t know when, we don’t know why, and we don’t know how deep it will be.

That uncertainty can drive one crazy, but it is that uncertainty which is necessary for the risk premium to exist. For without the prospect of risk in equities there would be no reward. It is not another correction that we should fear, then, but instead the widespread belief that there may never be another one.

Hat tip Charlie Bilello

Reality Hits You Hard, Bro…

Fantasy(1):  “In the event Donald wins, I have no doubt in my mind the market tanks,” Cuban said. “If the polls look like there’s a decent chance that Donald could win, I’ll put a huge hedge on that’s over 100% of my equity positions… that protects me just in case he wins.”  Mark Cuban, Sept. 7, 2016

Fantasy(2):  “So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”  Paul Krugman(Nobel Prize/Economics) Nov. 9, 2016

Fact:  Looking at all the U.S. elections going back to the creation of the Dow (1896), here is who had the most new highs that first year:

Trump 76 (’16)

Coolidge 60 (’24)

Clinton 51 (’96)

Hoover 44 (’28)

LBJ 37 (’64)

Hat tip Ryan Detrick

Strong Earnings

As the current earnings season begins to wind down, Ryan Detrick has some interesting data: 

90% of the S&P 500 Index has reported and year-over-year earnings growth is tracking +8.1% (over +11% excluding insured losses from the financial sector). Once again, coming in above the expectations.

Three key takeaways from earnings season:

1.) SP 500 revenue 1% above estimates

2.) WP500 earnings estimates for the next 4 quarters have risen 0.4% during the season (usually is lowered)

3.) Tech sector beat estimates by 11% – continues to lead

Impressive.

Hat tip LPL Research/Ryan Detrick

It’s Still Very Quiet Out There

 Nearly 96% of this year’s trading days have remained within a 1% range.  The longest such streak in history:

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 Hat tip Charlie Bilello

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