Comments Off by in CMW News
December 6, 2018

To begin with, what happened to last week’s normally monthly missive? Well, what a difference a day makes! – Or, in this case, two.  Usually this piece is going to press between Wednesday and late Thursday near the end of each month. Last week we had a feeling that Friday just might put another spin on the doldrums the market has been bubbling around in since late October. You do remember we said that October has a nasty reputation even during years the market ends up doing pretty well? So, what happened to November – a month that typically boasts better returns, but this year has experienced extreme volatility. Mid-terms, Trade Wars, Brexit, the Fed…you name it!!

Well, the market doesn’t like uncertainty. And, while mid-term elections historically tend rewind the market for another leg up, it didn’t help for an unusual degree of wrangling over certain key elections that lingered unresolved.  Even after the polls closed Florida, Georgia and Arizona faced counting issues, remaining unsettled. Still, just two days after elections the Dow closed at 26,191 – the highest market close for this November.

After what looked to be a great start for November, we experienced a nasty double dip from October’s first dip. Seen below:

On the other hand, as of Monday, December 3rd the Dow had risen 1,540 points from a low of 24,286 to 25,826, just 3.7% short of recovery from a 9.1% double dip correction – the second of its kind during this calendar year with more than a full recovery between! Why the rebound? It could be an increased optimism for potential consensus on trade talks between the U.S. and China at the weekend’s G-20 summit or, Federal Reserve Chairman Powell’s comments regarding rates and potential reprieve from 4 rate hikes in 2019. Or it could indicate a good ole Santa Claus Rally.

This month’s market activity is reminiscent of a ping pong match.  The media and sentiment go from positive to negative to positive and then back again. With this back and forth, back and forth we could end up with whiplash watching it. We suggest turning your attention to the joy of the season and give your neck a break. There’s still hope for a Santa Claus rally and while the economic fundamentals for the US economy remain strong, it’s evident that market volatility is likely to remain an unpleasant if not so welcome companion.

Have a great Holiday Season and keep the faith in the markets!

Indexes are listed in respective order to their reference above: DJ Industrial Average TR USD; S&P 500 TR. These materials have been prepared solely for informational purposes based upon data generally available to the public from sources believed to be reliable. All performance references are to benchmark indexes. Performance of specific funds will vary from respective benchmarks. Past performance is not an assurance of future results. Each index cited is provided to illustrate market trends for various asset classes. It is not possible to invest directly in an index.