In response to President Trump placing 10% tariffs on an additional $300 billion in Chinese exports beginning September 1st, China allowed its currency to depreciate below the important psychological CNY¥7/USD$1 level, which shook global equities markets. In quick succession, the U.S. slapped China with the “currency manipulator” label, China announced it would stop buying U.S. agricultural products, the U.S. [...]
It is hard to avoid seeing signs of a slowdown in the U.S. economy. Although still showing a slight expansion, key indicators for both manufacturing and services have declined. Looking at the global economy as a whole, there is now a slight contraction in manufacturing. The numbers excluding the US are even more dour, pushed lower by the impact of [...]
The first quarter was almost the exact opposite of the preceding quarter in terms of stock market returns. While the fourth quarter was one of the worst of the last ten years, the first quarter was one of the best. After hitting a low point on Christmas Eve, stocks have hardly hesitated and now sit just a few points below [...]
The final quarter of the year was a roller coaster in the stock market. After hitting record high levels in the first couple days of October, stocks sold off about 10%, then rallied, sold off, rallied again, and then had the worst December since The Great Depression. Of course, the ride continues as stocks have rallied about 11% off the [...]
Happy Halloween! Right in time for the season of spooks and specters came another October stock market selloff. October has a history of market selloffs, the most famous of which occurred in 1929 of course. October 19th was the 31st anniversary of Black Monday, the biggest one-day selloff in stock market history, in terms of percentage. And this month is [...]
Last quarter I discussed how the surge in volatility was due to the expectation for higher rates, the Trump tariffs, and the Facebook data breach. All three of those are still contributing to market gyrations. However the volatility has not stuck around, as measured by the VIX, which is a widely cited measure of stock market volatility. While not yet [...]
The calm year of 2017 has given way to a new dynamic so far in 2018, one where volatility has returned. The first quarter saw more 1% and 2% swings in the US stock market indexes than all of 2017 and in some cases 2016 combined. The Dow Jones Industrial Average rose 10 straight months through January 2018—this streak ended [...]
2017 was arguably the calmest year ever for the stock market. It was the first year in which the SPX total return was positive every single month (the closest was 1995 which had 11 positive months and a slightly negative October). The stock market has set new records for the most consecutive days without a 5% correction (broken on Monday [...]