October markets are living up to their reputations! As I said in my recently published book, Make Money Buying and Selling Stocks, “October is a Scary Month (many market crashes have occurred in October—Panic of 1907, Black Tuesday (1929), Black Thursday (1929), Black Monday (1929) and Black Monday (1987). The truth: October is on record for the most volatile month. According to CFRA Research from 1950 to present day, “the S&P 500 on average registers more daily moves of at least 1% in October than in any other month.” On the flip side, however, going back to 1950, the S&P 500 has averaged a gain of 0.7% in October, according to The Stock Trader’s Almanac.” And this October has certainly been volatile; yet, in terms of market action, we are about even for the last 30 days.
Wall Street’s Best Investments 822
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Market Views
Quiet for Now
Stocks finished a relatively quiet session lower today, after trading on both sides of breakeven amid waning optimism over Friday’s partial trade deal between Beijing and Washington. Reports emerged that China wishes to continue trade talks before finalizing the “phase one” deal, which would require China to purchase up to $50 billion in agricultural goods from the U.S., among other stipulations. Meanwhile, Treasury Secretary Steven Mnuchin said another round of tariffs on Chinese goods will go into effect in December, if a deal hasn’t been reached.
A fast-approaching earnings season was also on investors’ minds today, with a round of bank names set to report tomorrow. Against this backdrop, the Dow, S&P, and Nasdaq finished marginally lower.
Bernie Schaeffer, Schaeffer’s Investment Research, http://www.SchaeffersResearch.com, 800-327-8833, October 14, 2019
Consumers are Upbeat; Volatility Continues
We expect volatility to remain elevated as the twists and turns on the trade front play out, but we continue to believe that the health of the U.S. economy will ultimately trump everything. And, that in mind, some were of the belief that the handsome jump in stocks on Friday was due in large part to a better-than-expected recovery in the University of Michigan’s preliminary sentiment tally for October, suggesting that the American consumer remains upbeat, despite all of the drama emanating from Washington.
John Buckingham, The Prudent Speculator, www.theprudentspeculator.com, 877-817-4394, October 14, 2019
Still Bullish
Bullish chartists see a second bottoming pattern for the S&P 500. The initial phase of a US-China trade pact came into view. Some kind of deal this quarter continues looking likely.
The EU and UK will intensify Brexit discussions in a bid to craft a smooth separation by the end of this month, or during a short extension.
Banks won another round of regulation rollback from the Federal Reserve. They will eventually get back enough dynamite to blow up the financial system again.
The Fed will resume buying financial instruments, a move that looks like new QE but is not.
US consumer sentiment is much stronger than expected. Stocks are not overextended. Since January 2018, the S&P 500 is up only 3.4%.
Jason Kelly, The Kelly Letter, http://jasonkelly.com/kellyletter, October 13, 2019
To read the rest of this month’s issue, download the PDF.
The next Wall Street’s Best Investments issue will be published on November 20, 2019.
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