The stock market just re-taught investors a crucial lesson

The stock market just re-taught investors a crucial lesson

The best 100 days of the stock market ever just happened. That illustrates one of the most important lessons in finance in terms more clear than ever before. Aug 18, 2020 (CDN Newswire via Comtex) —
Global Cheese Ingredients Market 2020 by Manufacturers, Regions, Type and Application, Forecast to 2025 provides a… The stock market benefits from very little distribution, strong technicals, the Fed, the leaders, and the election. Joe Fahmy explains. Aug 18, 2020 (Profound via COMTEX) —
A recent report provides crucial insights along with application based and forecast information in the Global Fluid… The U.S. stock market hit an all-time high Tuesday, staging a stunning turnaround propelled by Big Tech as trillions of dollars in stimulus aid from the Federal Reserve and Congress helped prop up an American economy gripped by recession.

As the memes rightly state, 2020 is a disaster in many ways: more than 170,000 deaths from coronavirus, over 10% unemployment, and lines at the food bank. At the same time, the S&P 500 index (^GSPC) is at an all-time high, and it just had the best 100 days of all time.

What does this teach us? 

If one classic rookie mistake for investors is to think there are “rules” Congress and the Fed adhere to regarding what they can and can’t do to help the economy, another mistake would be to think there’s any logical connection between the market’s strength and the economy overall. 

On the one hand, a lot of investors jumped into the market in the spring as the S&P 500 took a 30% hit, falling to below 2,300 on March 23 from its February high. These investors have been the big beneficiaries of the run-up since the index is back to an all-time high.

But others stayed out of the market, seeing risk because they rightly judged that times were uncertain with a global pandemic raging and unemployment ready to balloon.

The times have been uncertain, but those who were stayed on the sidelines missed the best 100 days ever.

Up until recently, the best 100-day run was a 45.9% increase, beginning in July of 2009 after the Financial Crisis. That run and this current one are a head above the rest: According to analysis from LPL Financial, just four of the 17 best runs of all time have been gains of over 30%. 

A huge comeback, faster than ever. (Yahoo Finance)

The fact that the best 100 days of all time came amid one of the worst years for the economy in recent history underscores the key lesson advisers have continuously harped on: you, a regular person, are probably very bad at timing the market. 

As JPMorgan’s Annual Retirement guide and almost every other financial pro has pointed out over the years, missing the best 10 days in the market absolutely crushes portfolio returns over the long term. Missing the best 10 from 1999 to 2018 would lower annualized returns from 5.68% to 2.01%. Missing the best 20 would drop that down to -0.33%. Missing the best 60? -7.41%. They didn’t calculate the best 100, but there’s no way it’s good.

The point here echoes what Liz Ann Sonders, chief investment strategist at Charles Schwab, told Yahoo Finance on Monday: investing in the stock market is not about finding the right moment to get in and get out, but rather finding things to hitch your wagon to in order to grow your portfolio over the long haul. 

View photos

People walk along Broadway as they pass the Wall Street Charging Bull statue on July 23, 2020 in New York City. On July 22, the market had its best day in 6 weeks. (Photo by Michael M. Santiago/Getty Images)

Instead of getting out, Sonders said, change the level of your exposure as your positions grow — which is why you might want to check your 401(k) plan right now. One-hundred days of gains totalling over 50%? That’s definitely enough to knock your target allocations off kilter.  

And if you think that because the market is at an all-time high means we’re due for a reckoning, maybe! Or maybe not. According to LPL, the year after the 16 of the best 17 100-day runs, stocks were up.

“Previous big rallies usually saw continued strength, so don’t bet against this bull market just yet,” LPL Financial Chief Market Strategist Ryan Detrick wrote.

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.

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Source: finance.yahoo.com

Author: Ethan Wolff-MannSenior Writer


Global Cheese Ingredients Market 2020 Industry Chain structure, Market Competition, SWOT Analysis Report by 2025

Global Cheese Ingredients Market 2020 Industry Chain structure, Market Competition, SWOT Analysis Report by 2025

Then the report studies the market revenue and status of key manufacturers. The report decodes the sales, price, and gross margin analysis and global sales, price, growth rate, marketing trader, or distributor analysis. The study focuses on well-known global Cheese Ingredients market segments, competition, as well as the prospects for growth, constraints, and market analysis. The report notes the concept of service/product in many end-user sectors along with other implementations of these goods or services. Extensive regional analysis and competitive analysis for the 2020-2025 review periods have been provided in the report.

DOWNLOAD FREE SAMPLE REPORT:https://www.marketsandresearch.biz/sample-request/13114

NOTE: This report takes into account the current and future impacts of COVID-19 on this industry and offers you an in-dept analysis of Cheese Ingredients market.

Additionally company basic information, manufacturing base, and competitors list is being provided for each listed manufacturers: Chr. Hansen, Fonterra, DuPont, DSM, ADM,

Consumption, production, capacity, market share, growth rate, and prices are included for each product type segment of the market: Natural (Cheddar, Parmesan, Mozzarella, Gouda), Processed

Consumption, production, capacity, market share, growth rate, and prices are included for each application segment of the market: Ingredient, Milk (Fresh Milk, Powdered Milk, Milk Cream), Cultures, Enzymes (Rennet, Lipase), Additives

Leading Regions:

Global data, regional data, and country-level data are offered with the import-export scenario, consumption, and gross margin analysis, and the production rate is presented in this report. The global Cheese Ingredients industry report provides detailed bifurcation of each segment on global, regional, and country levels. Geographic penetration also shows the market potential, market risk, industry trends, and opportunities. On a regional basis, the global Cheese Ingredients market can be segmented into: North America (United States, Canada and Mexico), Europe (Germany, France, UK, Russia and Italy), Asia-Pacific (China, Japan, Korea, India and Southeast Asia), South America (Brazil, Argentina, Colombia etc.), Middle East and Africa (Saudi Arabia, UAE, Egypt, Nigeria and South Africa)

Moreover, the report also contains data on the type segment, industry segment, channel segment, etc. Also, the study covers different industries’ client’s information, which is very important for the manufacturers. It also provides threats to the market. In conclusion, the analysts provide unbiased information about the overall global Cheese Ingredients market in the report.

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Why the stock market could head higher into the Presidential election

Why the stock market could head higher into the Presidential election

In late March of this year, I wrote an article saying that even though the coronavirus numbers might get worse, it doesn’t mean that the stock market has to go lower. I followed it up with an article in mid-April titled: “The market might be forecasting a faster recovery than we expect.”

What gave me the conviction to write those articles was the price action of the market and its leading stocks. The big institutions control the market and interpreting what they are doing on a regular basis is far more powerful than listening to the news every day.

Currently, the price action is telling me the stock market will head higher into the Presidential election for the following reasons:

1) There is very little distribution. Distribution is a fancy word for professional selling. The simple definition of a distribution day is a down day on higher volume than the previous day. Since the March lows, we’ve seen some distribution days here and there, but no consistent follow through selling. This is important because in order to see a market top, we need to see several distribution days in a 3 to 4 week period. Until this happens, I am sticking with the trend.

2) Strong technicals. On a longer-term timeframe, the 10-week moving average is historically known as an area of institutional support. Right now, all the major indexes are above that key level. From a shorter-term view, strong stocks and strong markets tend to hold their 21-day moving averages and the Nasdaq Composite has done so since early April.

Chart is provided by MarketSmith

3) The Fed. There is a globally coordinated effort to keep interest rates low and the markets high. It’s not our job to argue with it, it’s our job to take advantage of it. The Federal Reserve is providing an insane amount of liquidity to make sure businesses and the economy recover from the recent downtown. As a result, this liquidity is also providing an equity friendly environment. There’s a reason the late Wall Street legend Marty Zweig said “Don’t Fight the Fed.” It’s not worth the aggravation fighting a machine that is determined to see the economy and the markets recover.

4) The leaders. Unlike 1999, the current market leaders have pristine balance sheets and earn a tremendous amount of cash. These companies continue to dominate internationally and have actually seen their businesses improve as a result of more people working from home and the increase in e-commerce. I follow unusual option activity and many of these stocks have seen non-stop bullish bets that they will be higher over the next 3 to 6 months. In addition, many money managers are underperforming on the year and if they are forced to chase this market, they will likely gravitate towards the Mega Cap names because they are liquid and have reliable earnings.

5) The election. President Trump wants to get re-elected. This is not a political statement, this is a common sense statement. In other words, any one running for re-election will do everything in their power to get re-elected. In President Trump’s case, this will include various tax cuts and keeping pressure on the Federal Reserve. In fact, there are already rumors that the Fed will provide additional stimulus at their upcoming September 15-16th meeting. Again, don’t argue with it, just do your best to take advantage of it.

Here are some counterpoints. I am always flexible with my approach to the markets. One of my favorite quotes from hedge fund legend Stanley Druckenmiller is: “Probably one of my greatest assets over the last 30 years is that I’m open-minded and I can change my mind very quickly.” In other words, if any of the above points change, such as distribution building up or the leaders breaking down, then I will shift to a more defensive posture for clients.

Another challenge is the increasing bullishness in many sentiment measures. My feeling is the market will occasionally “shake out” this exuberance with pullbacks along the way. Since the March lows, the market has seen several short-term pullbacks of 5-8% and this pattern is likely to continue just to keep the bulls in check. That is why it is so important to know your timeframe. If you are a shorter-term trader, one way to deal with this pattern is to take profits into strength and have some cash available for the inevitable pullbacks. If you are a longer-term investor and you have strong entry points on your investments, then you have to be patient and sit through some volatility along the way. Again, these are decisions that need to be made based on your own investment objectives and risk tolerance.

Similar to the articles I wrote in late March and early April, I am mainly making this call based on the price action of the market and its leading stocks. The large institutions — mutual funds, hedge funds, pension funds, etc. — control the market and interpreting what they do on a regular basis is very important. (If you are looking for help with this type of market education, you can find more at my website.)

The bottom line is the trend is higher into the election and I’m going to stick with it until the market tells me otherwise.

I can be reached at: jfahmy@zorcapital.com

Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained on this site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned on this site. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.

Source: finance.yahoo.com

Author: Joe FahmyContributor


Global Fluid Management and Visualization Systems Market 2020 Industry Segmentation, CAGR Status, Leading Trends, and Forecast To 2026

Global Fluid Management and Visualization Systems Market 2020 Industry Segmentation, CAGR Status, Leading Trends, and Forecast To 2026

With increasing cases of obesity all over the globe, a need for conducting an in-depth study about this healthcare issue led to the development of this report. Increasing binge eating and consumption of junk foods, neglect towards regular exercise, rising levels of stress, are key market drivers. The report discusses more information about these subjects, with a focus on the rising need for Fluid Management and Visualization Systems.

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A quantitative analysis of the industry is compiled for a period of 10 years in order to assist players to grow in the market. Insights on specific revenue figures generated are also given in the report, along with projected revenue at the end of the forecast period. With healthcare being a sensitive topic, a separate analysis is included that discusses the widespread continuing obesity all over the globe consequently increasing demand for surgical devices.

Companies and Manufacturers Covered

The study covers key players operating in the market along with prime schemes and strategies implemented by each player to hold high positions in the industry. Such a tough vendor landscape provides a competitive outlook of the industry, consequently existing as a key insight. These insights were thoroughly analyzed and prime business strategies and products that offer high revenue generation capacities were indentified. Key players of the global Fluid Management and Visualization Systems market are included as given below:

AngioDynamics
Richard Wolf
ConMed Corporation
B Braun
Olympus
Cardinal Health
Smiths Medical
Karl Storz
Ecolab
Smith and Nephew
Medtronic
Stryker Corporation
Traubco
Hologic

Dialyzers
Fluid Waste Management System
Others
Fluid Management and Visualization Systems Breakdown Data by Application
Hospitals
Specialty Clinics
Ambulatory Surgical Centers

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TABLE OF CONTENT

1 Report Overview
1.1 Study Scope
1.2 Market Analysis by Type
1.2.1 Global Fluid Management and Visualization Systems Market Size Growth Rate by Type: 2020 VS 2026
1.2.2 Dialyzers
1.2.3 Fluid Waste Management System
1.2.4 Others
1.3 Market by Application
1.3.1 Global Fluid Management and Visualization Systems Market Share by Application: 2020 VS 2026
1.3.2 Hospitals
1.3.3 Specialty Clinics
1.3.4 Ambulatory Surgical Centers
1.4 Study Objectives
1.5 Years Considered

2 Global Growth Trends
2.1 Global Fluid Management and Visualization Systems Market Perspective (2015-2026)
2.2 Global Fluid Management and Visualization Systems Growth Trends by Regions
2.2.1 Fluid Management and Visualization Systems Market Size by Regions: 2015 VS 2020 VS 2026
2.2.2 Fluid Management and Visualization Systems Historic Market Share by Regions (2015-2020)
2.2.3 Fluid Management and Visualization Systems Forecasted Market Size by Regions (2021-2026)
2.3 Industry Trends and Growth Strategy
2.3.1 Market Trends
2.3.2 Market Drivers
2.3.3 Market Challenges
2.3.4 Market Restraints

3 Competition Landscape by Key Players
3.1 Global Top Fluid Management and Visualization Systems Players by Market Size
3.1.1 Global Top Fluid Management and Visualization Systems Players by Revenue (2015-2020)
3.1.2 Global Fluid Management and Visualization Systems Revenue Market Share by Players (2015-2020)
3.2 Global Fluid Management and Visualization Systems Market Share by Company Type (Tier 1, Tier 2 and Tier 3)
3.3 Players Covered: Ranking by Fluid Management and Visualization Systems Revenue
3.4 Global Fluid Management and Visualization Systems Market Concentration Ratio
3.4.1 Global Fluid Management and Visualization Systems Market Concentration Ratio (CR5 and HHI)
3.4.2 Global Top 10 and Top 5 Companies by Fluid Management and Visualization Systems Revenue in 2019
3.5 Key Players Fluid Management and Visualization Systems Area Served
3.6 Key Players Fluid Management and Visualization Systems Product Solution and Service
3.7 Date of Enter into Fluid Management and Visualization Systems Market
3.8 Mergers amp; Acquisitions, Expansion Plans

4 Fluid Management and Visualization Systems Breakdown Data by Type (2015-2026)
4.1 Global Fluid Management and Visualization Systems Historic Market Size by Type (2015-2020)
4.2 Global Fluid Management and Visualization Systems Forecasted Market Size by Type (2021-2026)

5 Fluid Management and Visualization Systems Breakdown Data by Application (2015-2026)
5.1 Global Fluid Management and Visualization Systems Historic Market Size by Application (2015-2020)
5.2 Global Fluid Management and Visualization Systems Forecasted Market Size by Application (2021-2026)

6 North America
6.1 North America Fluid Management and Visualization Systems Market Size (2015-2026)
6.2 North America Fluid Management and Visualization Systems Market Size by Type (2015-2020)
6.3 North America Fluid Management and Visualization Systems Market Size by Application (2015-2020)
6.4 North America Fluid Management and Visualization Systems Market Size by Country (2015-2020)
6.4.1 United States
6.4.2 Canada

7 Europe
7.1 Europe Fluid Management and Visualization Systems Market Size (2015-2026)
7.2 Europe Fluid Management and Visualization Systems Market Size by Type (2015-2020)
7.3 Europe Fluid Management and Visualization Systems Market Size by Application (2015-2020)
7.4 Europe Fluid Management and Visualization Systems Market Size by Country (2015-2020)
7.4.1 Germany
7.4.2 France
7.4.3 U.K.
7.4.4 Italy
7.4.5 Russia
7.4.6 Nordic
7.4.7 Rest of Europe

8 China
8.1 China Fluid Management and Visualization Systems Market Size (2015-2026)
8.2 China Fluid Management and Visualization Systems Market Size by Type (2015-2020)
8.3 China Fluid Management and Visualization Systems Market Size by Application (2015-2020)
8.4 China Fluid Management and Visualization Systems Market Size by Region (2015-2020)
8.4.1 China
8.4.2 Japan
8.4.3 South Korea
8.4.4 Southeast Asia
8.4.5 India
8.4.6 Australia
8.4.7 Rest of Asia-Pacific

9 Japan
9.1 Japan Fluid Management and Visualization Systems Market Size (2015-2026)
9.2 Japan Fluid Management and Visualization Systems Market Size by Type (2015-2020)
9.3 Japan Fluid Management and Visualization Systems Market Size by Application (2015-2020)
9.4 Japan Fluid Management and Visualization Systems Market Size by Country (2015-2020)
9.4.1 Mexico
9.4.2 Brazil

10 Southeast Asia
10.1 Southeast Asia Fluid Management and Visualization Systems Market Size (2015-2026)
10.2 Southeast Asia Fluid Management and Visualization Systems Market Size by Type (2015-2020)
10.3 Southeast Asia Fluid Management and Visualization Systems Market Size by Application (2015-2020)
10.4 Southeast Asia Fluid Management and Visualization Systems Market Size by Country (2015-2020)
10.4.1 Turkey
10.4.2 Saudi Arabia
10.4.3 UAE
10.4.4 Rest of Middle East amp; Africa

11Key Players Profiles
11.1 AngioDynamics
11.1.1 AngioDynamics Company Details
11.1.2 AngioDynamics Business Overview
11.1.3 AngioDynamics Fluid Management and Visualization Systems Introduction
11.1.4 AngioDynamics Revenue in Fluid Management and Visualization Systems Business (2015-2020))
11.1.5 AngioDynamics Recent Development
11.2 Richard Wolf
11.2.1 Richard Wolf Company Details
11.2.2 Richard Wolf Business Overview
11.2.3 Richard Wolf Fluid Management and Visualization Systems Introduction
11.2.4 Richard Wolf Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.2.5 Richard Wolf Recent Development
11.3 ConMed Corporation
11.3.1 ConMed Corporation Company Details
11.3.2 ConMed Corporation Business Overview
11.3.3 ConMed Corporation Fluid Management and Visualization Systems Introduction
11.3.4 ConMed Corporation Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.3.5 ConMed Corporation Recent Development
11.4 B Braun
11.4.1 B Braun Company Details
11.4.2 B Braun Business Overview
11.4.3 B Braun Fluid Management and Visualization Systems Introduction
11.4.4 B Braun Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.4.5 B Braun Recent Development
11.5 Olympus
11.5.1 Olympus Company Details
11.5.2 Olympus Business Overview
11.5.3 Olympus Fluid Management and Visualization Systems Introduction
11.5.4 Olympus Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.5.5 Olympus Recent Development
11.6 Cardinal Health
11.6.1 Cardinal Health Company Details
11.6.2 Cardinal Health Business Overview
11.6.3 Cardinal Health Fluid Management and Visualization Systems Introduction
11.6.4 Cardinal Health Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.6.5 Cardinal Health Recent Development
11.7 Smiths Medical
11.7.1 Smiths Medical Company Details
11.7.2 Smiths Medical Business Overview
11.7.3 Smiths Medical Fluid Management and Visualization Systems Introduction
11.7.4 Smiths Medical Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.7.5 Smiths Medical Recent Development
11.8 Karl Storz
11.8.1 Karl Storz Company Details
11.8.2 Karl Storz Business Overview
11.8.3 Karl Storz Fluid Management and Visualization Systems Introduction
11.8.4 Karl Storz Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.8.5 Karl Storz Recent Development
11.9 Ecolab
11.9.1 Ecolab Company Details
11.9.2 Ecolab Business Overview
11.9.3 Ecolab Fluid Management and Visualization Systems Introduction
11.9.4 Ecolab Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.9.5 Ecolab Recent Development
11.10 Smith and Nephew
11.10.1 Smith and Nephew Company Details
11.10.2 Smith and Nephew Business Overview
11.10.3 Smith and Nephew Fluid Management and Visualization Systems Introduction
11.10.4 Smith and Nephew Revenue in Fluid Management and Visualization Systems Business (2015-2020)
11.10.5 Smith and Nephew Recent Development
11.11 Medtronic
10.11.1 Medtronic Company Details
10.11.2 Medtronic Business Overview
10.11.3 Medtronic Fluid Management and Visualization Systems Introduction
10.11.4 Medtronic Revenue in Fluid Management and Visualization Systems Business (2015-2020)
10.11.5 Medtronic Recent Development
11.12 Stryker Corporation
10.12.1 Stryker Corporation Company Details
10.12.2 Stryker Corporation Business Overview
10.12.3 Stryker Corporation Fluid Management and Visualization Systems Introduction
10.12.4 Stryker Corporation Revenue in Fluid Management and Visualization Systems Business (2015-2020)
10.12.5 Stryker Corporation Recent Development
11.13 Traubco
10.13.1 Traubco Company Details
10.13.2 Traubco Business Overview
10.13.3 Traubco Fluid Management and Visualization Systems Introduction
10.13.4 Traubco Revenue in Fluid Management and Visualization Systems Business (2015-2020)
10.13.5 Traubco Recent Development
11.14 Hologic
10.14.1 Hologic Company Details
10.14.2 Hologic Business Overview
10.14.3 Hologic Fluid Management and Visualization Systems Introduction
10.14.4 Hologic Revenue in Fluid Management and Visualization Systems Business (2015-2020)
10.14.5 Hologic Recent Development

12Analyst’s Viewpoints/Conclusions

13Appendix
13.1 Research Methodology
13.1.1 Methodology/Research Approach
13.1.2 Data Source
13.2 Disclaimer
13.3 Author Details

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The stock market closes at a record high, defying the COVID-fueled recession battering the US economy

The stock market closes at a record high, defying the COVID-fueled recession battering the US economy

The U.S. stock market closed at an all-time high Tuesday, staging a stunning turnaround propelled by Big Tech as trillions of dollars in stimulus aid from the Federal Reserve and Congress helped prop up an American economy gripped by recession. 

The resurgence comes despite a backdrop of historic job losses, bankruptcies and shrinking corporate profits after the economic fallout from the worst global pandemic in a century and one of the sharpest downturns since the Great Depression. The U.S. leads the world in coronavirus cases, recently surpassing 5.4 million, or roughly a quarter of global infections.

Still, investors have shrugged off a string of dismal economic data in recent months and a spike in outbreaks, opting to instead scoop up stocks at bargain prices as optimism grows for an economic recovery with further stimulus and a vaccine. Investors have also gained confidence from a strong housing market, improved consumer spending and better-than-expected second-quarter corporate profits.

Retirement savings:Americans piled money into 401(k)s, IRAs even as the coronavirus-fueled recession took hold

‘Insulin or groceries’:How reduced unemployment affects struggling Americans from California to Mississippi

“The new all-time highs will be met with disbelief, but the way people view the economy and the stock market is consistently wrong,” says Michael Antonelli, market strategist at Baird. “In the short run, financial markets don’t trade on good news or bad news. They trade on whether things are getting better or worse.”

There have been signs of improvement in the labor market recently. The number of Americans seeking jobless benefits dropped to 963,000 for the week ending Aug. 8, falling below 1 million for the first time since the shutdown began in the spring, the Labor Department said Thursday. The figures still remain above a peak of 665,000 in March 2009 following the aftermath of the global financial crisis.

Job creation has recovered in recent months but layoffs remain historically high, with about 13 million jobs lost during the pandemic. The unemployment rate stood at 10.2% in July, compared with a pre-pandemic jobless rate of 3.5% in February — the lowest in a half century. 

The S&P 500 rose 0.2% to close at 3,389.78 on Tuesday, breaking past its previous Feb. 19 high to finish at the highest closing level on record. The Dow Jones industrial average fell 66.84 points to 27,778.07, off about 6% from its Feb. 12 peak. The technology-laden Nasdaq Composite, which had rebounded to records in June, climbed 0.7% to 11,210.84, touching another high Tuesday.

Investors who sat on the sidelines during the market turbulence in the spring lost out on gains. If an investor had put $10,000 in an S&P 500 index fund on Dec. 31, 2019, it would have been worth $10,594.57 with dividends this year through Monday, according to S&P Dow Jones Indices.

High-flying stocks like Apple, Microsoft and Google parent Alphabet have powered this year’s rally, far outpacing the rest of the market as investors bet heavily they could prevail in a stay-at-home economy. Apple, the world’s most valuable public company, is closing in on a $2 trillion valuation for the first time. 

Big Tech makes up an outsize portion of the S&P 500, and the performance of the biggest stocks can have a disproportionate effect on the index. These companies typically derive a large portion of their revenues from outside of the U.S., making them more immune to the economic challenges from the pandemic than domestic companies. 

The return to all-time highs comes after stocks suffered steep losses following a downturn where the S&P 500 tumbled about 34% to a low on March 23, snapping a 11-year bull market run — the longest ever.

It took less than five months for the S&P 500 to go from its nadir to a fresh record on Tuesday. That makes this year’s bear market, or a drop of more than 20% from a peak, the shortest in history at 1.1 months from the S&P 500’s prior high on Feb. 19 to its low on March 23, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. 

Since the March lows, stocks have rebounded more than 50% after the U.S. central bank and lawmakers in Washington stepped in and provided an unprecedented amount of financial aid to shore up the economy, which has helped rejuvenate optimism around future economic growth. 

There could be more room for stocks to run in the coming months, analysts say. The stock market is betting that the pandemic will end eventually with a vaccine, and with help from better treatments in the interim. But any setback in the timeline for developing a vaccine could challenge the rally, they added.

“So much of this hinges on a vaccine,” says Ryan Detrick, senior market strategist at LPL Financial. “It’s going to take a long time for the economy to get back to where it was before the pandemic. But the likelihood of a vaccine over the next six to twelve months has boosted investor optimism as the economy slowly reopens.”

Still, there are challenges ahead that could threaten the stock market’s latest rally, including a second coronavirus wave, followed by simmering U.S.-China trade tensions and the upcoming presidential election in November, according to a Bank of America survey.

Some market professionals worry that a stalling U.S. economic recovery could slow the stock market gains. Investors hope for another coronavirus rescue package from Congress to help sustain the recovery, but talks among Republicans and Democrats hit a stalemate this month. 

This comes at a time when unemployment remains historically high and the enhanced jobless aid expired at the end of July, which many people view as a vital lifeline for millions of out-of-work Americans.

“It would be problematic to remove money from Americans’ pockets during a pandemic in a consumer-based economy,” says Antonelli. “It’s political wrangling. The framework is there for more stimulus. Now it’s about getting it all enacted.” 

Earlier this month, President Donald Trump signed executive actions that suspended some student loan payments, protected some renters from eviction and deferred payroll taxes. He also extended the expired benefit for unemployed workers, but the orders were more limited than what investors hoped to see. 

Last week, Treasury Secretary Steven Mnuchin said the White House was open to resuming stimulus talks with Democrats after negotiations broke down in recent weeks. But talks for a new stimulus deal dissolved by the time lawmakers left Washington late last week with no deal and no plans to return until September.

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Higher stock prices during recessions aren’t unusual. Stocks have risen during seven of the past 12 recessions going back to World War II, with a median advance of 5.7%, according to LPL Financial. 

To be sure, the U.S. economy has recovered just 42% of the 22 million jobs lost to the pandemic-induced recession, according to the Labor Department. And the economy saw its worst quarterly decline ever in the second quarter as a result of the pandemic driven by the lockdown. 

But that has done little to disrupt the stock market, which has remained resilient. One reason why, analysts say, is because investors view the markets as forward-looking.

“The unemployment reports and the GDP data aren’t earth shattering to investors because the data is old,” says J.C. Parets, founder of research firm All Star Charts. “It’s not that the data doesn’t matter. It’s that the market is pricing in what will happen six to twelve months from now, not what happened six months ago.” 

On Tuesday, investor sentiment got a boost following a batch of strong second-quarter earnings results from major retailers, signaling the strength of the U.S. consumer during the pandemic. Home Depot and Walmart both topped Wall Street earnings expectations, though their stocks were muted. 

The data coincided with a report that showed the housing market was improving after the virus outbreak paralyzed the American economy in the spring. Construction of new U.S. homes jumped 22.6% last month as homebuilders bounced back from a lull induced by the pandemic. New homes were started at an annual pace of nearly 1.5 million in July, the Commerce Department said Tuesday, the highest since February.

The yield on the 10-year Treasury dipped to 0.67% from 0.69% late Monday. In March, the yield had touched a record low just below 0.34%.

Source: www.usatoday.com


The stock market just re-taught investors a crucial lesson


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