The good news for the final day of 2018 is that there was no point during the trading session that the Dow was not up though there was still considerable volatility with the index swinging back and forth in a 200+ point range.  The really good news is that it closed in the upper part of that range 265 points up.  A good summary of the year came from today’s expert who stated that due to trade concerns and interest rates, “people started repositioning and that started the cascade.”  And though the year ended with roughly a 2,000 point loss from last January, it should be noted that it was mostly a positive year and almost all the losses came in Q4, mostly due to trade concerns and interest rates.  It should also be noted that the market was considered to be way overvalued at the beginning of Q4 so it could be argued that we are actually ending the year where we should have been all along.  And a big part of the slump came from the energy sector which fell 20 percent this year due to the chronic problem we’ve had for a long time as to the oversupply of crude, which alone plummeted nearly 40 percent.  Today’s Reuter’s report provides a pretty good list of bullet points of all the issues plaguing investors – China trade, the Fed path to rate hikes, slowing corporate growth, and the Brexit.  So 2019 will be interesting.  Volume was “light” at just under 7.5 billion but, again for perspective, under any other conditions, this would be considered brisk.  Happy New Year! 

mon  DECEMBER 31, 2018 / 5:49 pm 

Wall Street rises, limps across the finish line of a turbulent year

Stephen Culp

DJ:  23,327.46  +265.06        NAS:  6,635.28  +50.76          S&P:  2,506.85   +21.11    12/31 

NEW YORK (Reuters) - Wall Street advanced in low-volume trading on Monday as revelers gathered to ring in 2019, marking the end of the worst year for U.S. stocks since 2008, the height of the financial crisis.  Wall Street entered correction territory in late January and was challenged for much of 2018 by tariff jitters, rising interest rates, and fears of diminishing corporate profits.

“Investors got complacent,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta. “People were positioned for the lack of volatility, and when that changed because of trade concerns and interest rates, people started repositioning and that started the cascade.”

December was a particularly trying month for U.S. equities. The S&P 500 .SPX saw its worst December since the Great Depression and the Nasdaq .IXIC confirmed it was in a bear market, or 20 percent below its high. All three are down about 9 percent since the beginning of the month.  In the new year, investors hope for the removal of question marks that acted as significant headwinds in 2018, including U.S.-China trade negotiations, the path of U.S. Federal Reserve interest rate hikes, slowing corporate growth and economic fallout from the upcoming departure of Britain from the European Union, or Brexit, among other concerns.

As 2019 gets underway, “investors will be looking to corporate earnings, what happens with the trade negotiations and the body language of the Fed,” Martin added.

On Monday, renewed hopes for a resolution to the U.S.-China trade dispute provided a glimmer of optimism for investors.  U.S. President Donald Trump indicated on Twitter that progress had been made toward a potential settlement of trade tensions between the United States and China which have plagued stock markets for much of the year.

Trading volume was relatively light, owing to the holiday as the U.S. federal government shutdown entered its 10th day.

Healthcare .SPXHC and tariff-sensitive technology .SPLRCT stocks, led by Boeing Co (BA.N) and Caterpillar Inc (CAT.N), provided the biggest boost to the S&P 500 on Monday.

The Dow Jones Industrial Average .DJI rose 265.06 points, or 1.15 percent, to 23,327.46, the S&P 500 .SPX gained 21.11 points, or 0.85 percent, to 2,506.85 and the Nasdaq Composite .IXIC added 50.76 points, or 0.77 percent, to 6,635.28.  All 11 major sectors in the S&P 500 ended the session in positive territory. But for the year, only healthcare and utilities .SPLRCU ended 2018 higher.  Energy .SPNY, materials .SPLRCM, communication services .SPLRCL, industrials .SPLRCI and financials .SPSY were the biggest percentage losers of 2018, down between 14.7 percent and 20.5 percent from the beginning of the year. 

The 20.5 percent drop of energy stocks in 2018 was largely attributable to crude prices LCOc1 plunging 38 percent since early October.

Advancing issues outnumbered declining ones on the NYSE by a 2.42-to-1 ratio; on Nasdaq, a 1.81-to-1 ratio favored advancers.  The S&P 500 posted no new 52-week highs and no new lows; the Nasdaq Composite recorded eight new highs and 98 new lows.

Volume on U.S. exchanges was 7.46 billion shares, compared with the 9.22 billion-share average for the full session over the last 20 trading days.