We entered the month of September with an over-bought US stock market and it did not take long for a down movement to take hold in the US markets to reflect that state with the technology heavy Nasdaq 100 stocks leading the way.
Back in January and February this year we were making new all- time highs in the most diversified stock market – S&P 500. We then had a set- back…. which moved into a recession
Although the news is far from ideal on a number of fronts, when we look at the largest and strongest stock market around the world, the S&P 500 in the US, we see a breakout to a new high but not the all time high reached in February of this year at around 3,375.
One of the lagging sectors in this massive stock market recovery has been the major banks – both in Canada and elsewhere. One could say, you will not have a strong economy without the bank sector contributing to the growth.
Volatility certainly seems to be the name of the game lately. The stock markets went down very fast and bounced back (somewhat) very fast. The Leading Nasdaq Composite made it back to where it started the New Year – the start of the New Decade. Remember the Roaring 20’s?
WOW! Markets go down, markets go up. Does anyone really know what is going to happen next. In the end many say it always goes higher but there are some exceptions to that rule just like all rules.
Last week we experienced a significant drop in the US stock markets from all-time highs. A sudden drop of this magnitude from all-time highs does not happen very often so it does make sense to put it into some context to see if it is simply another buying opportunity that is occurring or is it something different.
It certainly has been a good upward move in the North American markets since we posted our last blog reflecting the positive movement in October.
Last week we saw the US S&P 500 definitively breakout to the upside despite seeing some questionable earnings from a number of industrial companies during earnings season.
October does have a history when it comes to the stock market and it’s a history one would like to avoid. Just last year, the US S&P 500 had a pullback in October after reaching new highs in September.
Although many of our indicators descended to lower levels in August, the US S&P 500 has shrugged this resistance off and is looking to break out to higher highs.
Although the US S&P 500 made another new high near the end of July around 3,020, it didn’t last as the US President decided to issue a “Tweet” on August 1, 2019 suggesting more tariffs will be imposed on China effective September 1, 2019.