It’s been a while since I’ve last posted anything. There are a couple of reasons. Most importantly, I have no idea what to say. I’m very surprised, I confess, by the mauling the market has experienced since late September. Relentlessly. Earnings have been, and are, good, which is what sustains market growth. Inflation, interest rates, employment, too, have all remained strong. Maybe off their best levels but strong with little to lead me to believe they and other signs of economic health are tanking. Is it Trump’s tweets?
Still, markets have struggled, to put it politely. If I were less polite, I’d say markets resemble a clinically-depressed patient wandering around naked on the roof of a tall building pondering a big jump.
I think we’ve just hit a sixth day when markets were up, usually early in the day, and by closing lost two to three percent – on little or no news. Just because.
Weird stuff keeps coming up. Like Monday. The United Kingdom’s Teresa May seemed to face rejection by her party along with her Brexit plan. Yet, U.K. stocks were performing far better on the day than America’s in light of our read of events over there? Why? No idea.
We have had 800 point falls in a day because trade concerns with China arise. Then, soon after, we get more clarity on the improving state of trade concerns with China. And markets fall more.
Right now, there simply doesn’t seem to be any way to win. All bad news is seen as very, very bad news, and all good news is seen as bad. It happens sometimes. It won’t last. But it can hang around for a while. Until it doesn’t. It’s just a shame, though, that performance during the best month of the year – December – has so far been such a bust, down about 4%, month-to-date. Again, why has this happened?No idea.
It will not last. It’s just one of the market’s occasional irrational spells. In the long run, the market gets it right. It’s in the short term it can overshoot or undershoot in strange ways. Like now.
Hang on, friends. The ship will be righted. Soon, I think, too. Things still look too good for the market to be doing what it’s doing for much longer.