A late week sell-off saw stocks barely break their early October lows, with the S&P 500 now down 7.9% from the late-July peak. Although the weakness the past few months hasn’t been fun for investors, it is important to note that stocks are still up more than 10% for the year and a fourth-quarter rally is still expected. October volatility continued, but a major late-October low could be forming. The economy has strong momentum, with growth accelerating since the first half of the year. Retail and food service sales have increased at an 8.6% annualized pace over the last three […]

Few investors expected war to break out in Israel, but stocks still eked out a gain on the week. As devastating as the events in the Middle East have been, to see stocks gain suggests they likely have bottomed and could be due for a fourth-quarter rally. Unsurprisingly, gold and oil had strong gains. In the face of grave headlines, stocks finished higher last week, increasing the likelihood that they bottomed in early October. Geopolitical events can be tragic; yet, in many cases the economy and stock markets take them in stride. An upside inflation surprise looked better beneath the […]

Stocks had a solid late-week reversal higher, even as many worries and concerns piled up. From the U.S. House not having a speaker for the first time ever, to yields soaring, to deficits and spending, the list of worries was high. But there’s an old saying that the market tends to rally on a wall of worry. As we noted in early August, there was a little too much optimism as long-term bears turned bullish, opening the door for seasonal third-quarter weakness. Now in October we think a low could be near. Stocks tend to bottom in October, and we […]

After the S&P 500 experienced its best seven-month start to the year since 1997, stocks pulled back in the historically troublesome months of August and September. Although unenjoyable for investors, the slump may be necessary to set stocks up for a year-end rally. Stocks fell in August and September, but this was not surprising to us. The decline opens the door to a solid end-of-year rally in the historically strong fourth quarter. An overwhelming majority of the U.S. House and Senate voted to punt a shutdown for another 45 days. Student loan payments restart in October, but this is unlikely […]

The September swoon continued last week, as stocks sold off hard after the Fed’s decision to leave interest rates unchanged. This type of seasonal weakness shouldn’t be a surprise. We’ve been discussing the potential for August and September volatility for a while now. It’s important to remember the S&P 500 had its best start after seven months to any year since 1997, so some type of weakness in the troublesome months of August and September is normal. Pre-election years tend to be very strong for stocks the first half of the year; then they chop around in the fall months […]

Stocks continue to trade in a choppy range after the best seven-month start to a year since 1997. August and September tend to see seasonal weakness, and this is playing out once again as expected. Bullish investors may view this as encouraging, as they would prefer to see stocks catch their breath before an eventual move higher, which we still expect over the coming months. Stocks continue to consolidate, which is perfectly normal for this time of year. Some signs indicate stocks will break out to new highs once the consolidation is complete. Energy prices pushed headline inflation higher in […]