Wall St. ends last day of haunted October in the black

With today’s second consecutive 3-digit rally, Q3 once again is back in charge as the market finished this very difficult month in the black.  With the tech sector having come so close to correction levels in the past week, today was the big comeback with all the FAANG stocks gaining and the Nasdaq gaining 3.6 percent in the last two sessions.  But October was rough – down 6.9 percent for the S&P, 9.2 for Nasdaq (the biggest monthly loss in ten years) and 5.1 for the Dow, the biggest monthly decline in almost two years.  Still, the prognosticators soar with the Q3 forecast now hiked to 26.3 percent, up from 25.3 just yesterday.  All bad news aside, the market runs on expectations and these expectations are sky high.  Volume was certainly also sky high at 9.8 billion shares traded. 

Wall St. rebounds as chip, transport shares surge

So is it really a correction that’s going on out there or is it just trade war/Q3 jitters that almost immediately get interrupted by bargain hunters who know that the market is a little over-valued to begin with?  Anyway, today was a bargain hunter’s paradise as the Dow went straight up 431 points very nearly recouping all the losses from the last two sessions.  As today’s expert has stated, the volatility is not because of a poor Q3 (we’re having a very good Q3) but because despite the fact that most of the companies are doing quite well, the few that aren’t happen to be some of the biggest names, and that’s been disquieting.  But not enough to dampen the forecast which is now at an astounding 25.3 percent increase in earnings (vs 23.6 last week) so the smart money remains firmly entrenched in the growth column.  As has been the trend lately, volume was again very high at 9.6 billion shares traded. 

Wall Street drops on trade worries, S&P 500 nears correction

Everyone was hoping for the big turnaround today.  And that’s exactly what happened right out the gate this morning, the Dow straight up over 350 points by about 11 a.m.  Then came the announcement that more tariffs would likely be coming against China, a lot more tariffs.  And all the king’s horses and all the king’s men … you know the rest of it.  The Dow tumbled and tumbled over 900 points before recovering in the final half hour to a 245 point loss on the day.  That’s how fragile the markets are these days.  Even a whiff of trouble sends everyone running for the exits, today so severely that both the Dow and S&P came within a hair’s breath of the 10 percent correction mark from their most recent highs.  The FAANG stocks were hit particularly hard and lost more than $200 billion in value between Friday and Monday.  Companies like Boeing that are exposed to China were very hard hit.  But Q3 profits and economic growth remain strong.  Things might settle down a bit after the election.  Volume was very vigorous at 9.3 billion shares traded. 

Succinct Summations for the week ending October 26th, 2018 (plus market timing)

Below please find the usual weekly summation.  On the plus side, GDP for Q3 came in higher than expected and durable goods orders actually increased instead of the expected decrease.  The negatives include new home sales and inventories coming in under expectations. The bonus this Sunday evening is another instructive graphic which, in one simple eye-shot, illustrates a concept that most of us are already well familiar with -- that overall most of those who try to time the market do not do nearly as well as those who don't.  The more timing that goes on, the more the best market days are missed.  Hope everyone had a great if wet and cold weekend. 

Does trade cause growth? - Our World in Data

While we wait until Monday to see whether this week's slide continues or begins to turn around, I found this very instructive article and graphic today that pretty clearly illustrates that there is a definite correlation between global trade and domestic GDP.  Looking at data going back to 1945, the inescapable conclusion is that the more trade you have with other countries, the higher your own GDP goes.  It's a quick read and an even quicker eye-shot.  Keep enjoying this pre-Halloween weekend.  Stay warm and dry.

S&P 500 ends at lowest since May as tech, internet stocks tumble

It was mentioned yesterday that because both Amazon and Google turned in bad Q3 reports after the closing bell on Thursday, that there might be another major sell off today.  That’s exactly what happened, another very bad 3-digit loss that brought the entire FAANG group down, put the S&P below the 10 percent correction level, and the Dow back in the red for the year.  This was all despite the fact that there was a bunch of good economic news today.  GDP growth slowed less than expected, consumer spending was at its strongest in four years, there was a surge in inventory investment, and the VIX did not go up again.  The other good news is the consensus that the tech sell-off was caused by elevated valuations, which makes it a good thing.  Investors continue looking for bargains but there’s no getting around the market jitters caused by tariffs, inflation, and the midterms.  Volume was very high at 10.2 billion. 

Wall St. rebounds after upbeat earnings, bargain hunting

After yesterday’s really big rout, today was quite the bump with investors regaining some faith when Microsoft turned in a sterling report and the market decided Wednesday’s big sell off was an overreaction and started buy tech again like crazy, raising that sector’s index by nearly 3 percent.  Other big Q3 reports included giants Ford, Visa, Whirlpool and Twitter.  The Dow was actually up over 500 points as late as 3:30 but slumped in the last few minutes to close at a +401.  The rally may also have been triggered by the fact that the recent slumps have devalued the S&P to a 2-1/2 year low so there are lots of bargains out there.  Once again, despite the bads news and nerves, the Q3 forecast has been raised again today, this time to 23.6 percent.  This compares to 22.4 just yesterday and 21.8 two weeks ago.  Some bad news:  both Amazon and Google turned in bad Q3 reports after the closing bell.  Are we looking at another sell off tomorrow?  Volume remains brisk at 9.2 billion.